TRAINING CENTER AND FRACTIONAL OWNERSHIP AGREEMENT
This TRAINING CENTER AND FRACTIONAL OWNERSHIP AGREEMENT ("Agreement")
is made this 14th day of September, 1999 (the "Effective Date") by and between
AIMS CONTINUING EDUCATION AUTHORITY, a Colorado nonprofit corporation, having
its principal office and place of business at 0000 Xxxx 00xx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 (the "Authority"), and TRAINING DEVICES INTERNATIONAL, INC., a
Colorado corporation, having its principal office and place of business at 0000
Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxx #0X, Xxxxxxxxx, Xxxxxxxx 00000 ("TDI"; the
Authority and TDI sometimes hereinafter named individually as "Party" and
collectively the "Parties").
WHEREAS, the Authority and TDI desire to establish a full flight
simulator training center to be located at or near the Greeley campus of Aims
Junior College District; and
WHEREAS, TDI desires to gift to the Authority, and the Authority
desires to receive, a fractional ownership interest in a full flight simulator
to be built by TDI; and
WHEREAS, TDI desires to manage and operate the training center and
manage the use, maintenance and operation of the full flight simulator.
NOW THEREFORE, in consideration of the premises and the mutual
agreements, representations, warranties, covenants and understandings
hereinafter set forth, the sufficiency of which consideration is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings when used herein with initial
capital letters:
"AGREEMENT" means this Agreement.
"AUTHORITY" has the meaning set forth above, and shall include the
College to the extent the Authority assigns its rights hereunder to the College.
"BUILDING" means that building to be provided by the Authority for the
purpose of, among other things, housing the Center.
"CALENDAR" means the calendar maintained by TDI in real time on an
Internet web site showing, among other things, the Hours for which use of the
Equipment has been scheduled and the name of the party scheduling such use.
"CENTER" means the Premises, together with all leasehold improvements,
and the Equipment and other personal property relating to the operation or
maintenance of the Equipment.
"CLAIM" means any and all liabilities, obligations, losses, damages,
deficiencies, demands, claims, fines, penalties, interest, assessments,
judgments, actions, proceedings and suits of whatever kind and nature and all
costs and expenses relating thereto (including, without limitation, reasonable
attorneys' fees).
"COLLEGE" means Aims Junior College District.
"COMMENCEMENT DATE" means the date when the Lease will be effective and
which is the earlier of (a) the Installation Date, (b) the date that the
Equipment is first delivered to the Premises, or (c) the date TDI first makes
preparations at the Premises for the delivery or installation of the Equipment.
"EQUIPMENT" means the Beech 1900 D Level C Full Flight Simulator to
be manufactured by TDI for use under this Agreement.
"FAA" means the Federal Aviation Administration.
"1ST CHOICE LIEN" means the security interest in the Equipment granted
to 1st Choice Bank.
"FRACTIONAL OWNERSHIP AGREEMENTS" means those agreements entered into
between TDI and the Fractional Share Owners, other than the Authority, governing
the ownership of the Fractional Shares.
"FRACTIONAL SHARE" means each and any 1,000 Hour ownership interest in
the Equipment.
"FRACTIONAL SHARE OWNERS" means the Authority and those individuals or
entities that purchase one or more Fractional Share(s) and execute the
Fractional Ownership Agreements.
"HOUR" means one hour of usage of the Equipment.
"INSTALLATION DATE" means the date specified by TDI by written notice
to the Authority pursuant to Section 4.01 when TDI anticipates installing the
Equipment at the Premises.
"LEASE" means that lease agreement to be entered into between the
Authority and TDI with respect to the Premises, such lease agreement to be
substantially in the form of EXHIBIT A attached hereto and made a part hereof.
"LEGAL REQUIREMENT" means any statute, ordinance, code, law, rule,
regulation, order or other requirement, standard or procedure enacted, adopted
or applied by any governmental authority, including judicial decisions applying
common law or interpreting any other Legal Requirement.
"LIEN" means any mortgage, lien, security interest, security agreement,
conditional sale or other title retention agreement, pledge, option, charge,
assessment, restriction, adverse interest,
restriction on transfer or any exception to or defect in title.
"OWNERS MANUALS" means all owners manuals and other technical materials
relating to the Equipment as provided to the other Fractional Share Owners which
may be reasonably necessary for the operation of the Equipment.
"PREMISES" means the approximately 4,000 square feet of the Building to
be leased by TDI from the Authority pursuant to the Lease.
"PROHIBITED LIEN" means any Lien which through any of act or omission
of TDI attaches to the Equipment or any Fractional Share, other than (a)
mechanics liens to be discharged in the ordinary course of business, (b) the
rights of any other Fractional Share Owner pursuant to the terms of a Fractional
Ownership Agreement, or (c) any financing arrangement entered into by a
Fractional Share Owner, but only with respect to such Fractional Share Owner's
Fractional Share.
"QUALIFICATION DATE" means the date that the Equipment receives initial
FAA Level C qualification.
"SOFTWARE" means all computer software and hardware included in or
constituting a part of the Equipment.
"TRANSFER DATE" means the date upon which TDI gifts to the Authority
all right, title and interest in and to one Fractional Share pursuant to Section
3.01, which shall be the earliest date that TDI transfers ownership of a
Fractional Share to any other Fractional Owner.
"YEAR" means the period of time beginning on the Qualification Date and
on the same date for each subsequent year during the term hereof, and ending at
12:00 midnight on the day before the same date of the year next following.
"YEAR 2000 COMPLIANT" means that the Software shall: (a) manage and
manipulate data involving dates, including, without limitation, century and
multi-century formulas and leap year formulas, without causing an abnormal end
to the application or generating incorrect values involving such dates; (b)
provide that all date-related user interface functionalities and date fields
include the indication of a century; (c) provide that all date-related data
interface functionalities include the indication of a century; and (d) provide
that all logic pertaining to dates will work within the context of the Software
to easily identify or use the century portion of any date fields without any
special processing.
ARTICLE II
THE CENTER
SECTION 2.01. MANAGEMENT. TDI shall manage and operate the Center,
provided that the Authority may, from time to time, have input. In connection
with the management and operation of the Center, TDI shall, at is sole cost and
expense:
(a) employ and supervise the Center personnel;
(b) schedule the use of the Equipment;
(c) maintain the Center as provided in the Lease;
(d) provide such training as may be necessary or advisable to
qualify such of the Authority's or the College's employees or
independent contractors as may be designated by the Authority in the
proper operation of the Equipment; and
(e) require and ensure that at least one Center personnel is
supervising the operation of the Equipment at all times that the
Equipment is in use or scheduled for use.
SECTION 2.02. TRAINING CENTER. The Authority shall lease to TDI the
Premises which shall meet the specifications and standards set forth in EXHIBIT
B attached hereto and made a part hereof. The Lease shall be executed and
delivered by each of the Authority and TDI within five business days after the
location and design of the Building have been finalized by the Authority. TDI
may occupy the Premises pursuant to the terms of the Lease and the Premises
shall be ready for installation of the Equipment on or before the Installation
Date.
SECTION 2.03. CENTER LEASE. As more fully set forth in the Lease, the
Lease shall provide among other things, that:
(a) TDI shall pay the Authority equal monthly lease payments
aggregating per annum $127,000 in years one through four, $137,000 in
years five through seven and $147,000 in years eight through ten, which
lease payments shall be on a triple net basis, except that the
Authority shall provide at its own expense (i) general interior
maintenance, cleaning and janitorial services, (ii) the maintenance of
the exterior and roof, and (iii) the maintenance of the heating,
ventilation, and air conditioning systems;
(b) the initial term shall be ten years from and after the
Commencement Date;
(c) within 90 days prior to the expiration of the then current
term, the Authority and TDI may, but shall have no obligation to, enter
into a mutually agreeable five year extension of the Lease, the annual
rent for which five-year period shall be the prior year's base rate
increased by the cumulative consumer price index for the prior five
years;
(d) upon the expiration of the term of the Lease, whether of
the initial term or any extension, TDI shall relocate the Equipment
within six months thereafter, during which period TDI shall continue to
make lease payments at the then current rate; and
(e) TDI shall procure and maintain in full force and effect,
at all times, commercial general liability insurance relating to the
operation of the Center and fire and casualty insurance on the
leasehold improvements and other personal property of the Center and
the Authority shall be responsible for securing fire and replacement
insurance on the Building.
SECTION 2.04. CENTER OPERATING COSTS. The Authority shall install a
separate utility meter for the Center, and TDI shall reimburse the Authority for
the monthly utility costs incurred by the Center. TDI shall provide the
Authority with the electricity requirement for the Equipment, and the Authority
shall ensure that the Center is sufficiently wired to meet that electricity
requirement. TDI shall be liable for, and shall pay, any and all costs or
expenses incurred by it in connection with the performance of its duties and
obligations hereunder, including all personnel costs and other normal operating
expenses of the Center.
SECTION 2.05. EXPANDED TEACHING CONTENT. The Parties agree that they
will explore diligently ways to expand the teaching content of the Center to
include all relevant academic disciplines at the Authority and the College.
ARTICLE III
FRACTIONAL OWNERSHIP OF EQUIPMENT
SECTION 3.01. GIFT OF ONE FRACTIONAL SHARE.
(a) TDI hereby covenants and agrees to gift, transfer and
assign to the Authority all right, title and interest in and to one
Fractional Share in perpetuity on the Transfer Date pursuant to a xxxx
of sale. From and after the earlier of the Transfer Date or the
Qualification Date the Authority shall have the right to use, or to
assign the right to use, the Equipment for 1,000 hours per Year. The
Authority can use its Hours as it wishes subject to the limitations set
forth in Sections 3.07 and 3.08. The Authority shall have no liability
with respect to any costs or expenses associated with ownership or
management of the Equipment or with using its Hours, except to the
extent of any liability set forth in Sections 3.06, 3.07 and 3.09.
Prior to the Transfer Date, TDI shall deliver to the Authority all
Owners Manuals.
(b) TDI acknowledges and agrees that the Authority, in
reliance upon TDI's representations, warranties, covenants and
agreements contained herein, will develop and implement a curriculum
based on the Equipment for the benefit of students of the Authority and
the College. TDI's obligations under this paragraph (b) will be
satisfied once TDI gifts, transfers and assigns to the Authority all
right, title and interest in and to one Fractional Share in accordance
with the terms hereof.
SECTION 3.02. REPRESENTATION AND WARRANTIES. TDI hereby represents
that as of the Transfer Date:
(a) TDI shall have good and marketable title to the Equipment
free and clear of any and all Liens.
(b) The Equipment shall be free from defects of workmanship
and design for a period of one year from and after the Qualification
Date.
(c) TDI has delivered to the Authority true and complete
copies of all Owners Manuals.
(d) All Software shall perform, operate and function when used
prior to, during and after the calendar year 2000 A.D. without error
relating to date data, including, without limitation, any error which
represents or references the incorrect century or more than one
century, and shall be Year 2000 Compliant when used in connection with
the Equipment.
(e) TDI either owns, owns jointly or has the right to use as a
licensee all of the Software in connection with the Equipment and to
transfer ownership to Equipment as contemplated herein, free and clear
of Liens, including any exclusive rights, however described, granted to
persons with respect to the Software.
SECTION 3.03. MANAGEMENT. TDI hereby covenants and agrees to manage
the Equipment for the benefit of the Fractional Share Owners and the
Authority's Fractional Share for the benefit of the Authority. In addition to
its obligations otherwise set forth herein, TDI covenants and agrees that it
shall:
(a) use, manage, maintain and operate the Equipment, for the
benefit of the Fractional Share Owners, with all due reasonable care
and in accordance with all applicable Legal Requirements, including any
standards and guidelines established by the FAA;
(b) permit the Equipment to be used only as contemplated by
the manufacturer thereof as specified in the Owners Manuals and in a
manner consistent with FAA Level C qualification;
(c) respond to all FAA and manufacturer's correspondence and
directives;
(d) identify and diligently prosecute enforcement of all
warranty claims; and
(e) identify and diligently prosecute all enforcement,
litigation and settlement of insurance matters.
SECTION 3.04. FAA QUALIFICATION. TDI shall be solely responsible for
(a) installing the Equipment in the Premises, (b) submitting the Equipment to
the FAA for initial FAA Level C qualification of the Equipment no later than 30
days after the Installation Date, and (c) maintaining Level C FAA qualification
of the Equipment thereafter.
SECTION 3.05. MAINTENANCE. From and after the Transfer Date, TDI
shall, at its own cost and expense, (a) maintain, inspect, service, repair
and test the Equipment by duly competent personnel in strict accordance with
the manufacturer's maintenance program and any applicable FAA rules,
regulations or directives as may be in effect from time to time, so as to
keep the Equipment in good operating condition, and in such condition as may
be necessary to enable the FAA Level C qualification of the Equipment to be
maintained in good standing at all times, (b) maintain an adequate supply of
spare parts, (c) repaint the exterior and refurbish the interior of
the Equipment as often as necessary to the extent required to keep the Equipment
in a good cosmetic appearance as reasonably determined by TDI, and (d) maintain
all records, logs and other materials required by the FAA to be maintained in
respect of the Equipment and make the same available for inspection by the
Authority during normal business hours. TDI shall schedule maintenance on the
Calendar as far in advance as possible and so as not to disrupt the scheduled
Hours.
SECTION 3.06. INSURANCE. TDI covenants and agrees to arrange for,
obtain and keep in effect, for the benefit of the Fractional Share Owners, on or
before the Transfer Date, all-risk insurance with a deductible, in such amount
as may be determined by owners of four of the Fractional Shares, with respect to
the Equipment, against any loss, theft or damage to the Equipment, including
extended coverage with respect to any parts while removed from the Equipment for
the greater of the fair market value or the replacement cost of the Equipment,
naming the Fractional Share Owners as named insureds and loss payees with losses
payable as their respective interests may appear. Copies of such policies and
certificates of insurance shall be furnished to the Authority on or before the
Transfer Date. Such insurance shall be maintained by TDI in full force and
effect throughout the term hereof and the insurer shall provide the Authority
30-days advance notice of cancellation or material alteration. All such
insurance shall contain a breach of warranty endorsement in favor of the
Fractional Share Owners. The Authority shall be liable for and shall reimburse
TDI for its share of the cost of such insurance based on its Fractional Share
ownership percentage.
SECTION 3.07. SCHEDULING. The Authority shall be entitled to the use
of the Equipment, and TDI agrees to make the Equipment available to the
Authority, for 1,000 Hours each Year at no cost to the Authority. TDI shall
maintain the Calendar. The Authority may schedule Hours up to four months in
advance by posting on the Calendar, subject to availability. Once scheduled,
the Authority's Hours may not be changed or modified in any manner without
the Authority's prior written consent. Third party users of the Equipment,
who are not Fractional Share Owners, may schedule Hours no more than three
months in advance, subject to availability. The Authority may purchase up to
an additional eight Hours per week, Monday through Thursday from 2:00 A.M. to
6:00 A.M., subject to Equipment availablity. The Authority may schedule such
additional Hours up to 60 days in advance. The Authority will be charged
$65.00 for each additional Hour.
TDI shall schedule all maintenance between the hours of 2:00 A.M. and
6:00 A.M. as far in advance as practicable. To the extent the Equipment is
unavailable for use when scheduled, TDI shall use its best efforts to
accommodate the user or users scheduled during that time and reschedule a
similar number of Hours as soon as possible.
SECTION 3.08. SALE OF THE AUTHORITY'S HOURS. TDI shall use
commercially reasonable efforts to sell such of the Authority's 1,000 Hours
per Year as the Authority may request from time to time, as agent for the
Authority at a market rate to be established by TDI and agreed to by the
Authority. TDI shall xxxx and collect for the sale of the excess hours and
remit to the Authority fifty percent (50%) of the collected fees within ten
(10) days from the end of each month. The remaining 50% shall be retained by
TDI as its fees for selling the Hours. TDI shall use commercially reasonable
efforts to collect such fees, but shall not commence any action in the
Authority's name without the prior written consent of the Authority. However,
TDI shall not be
responsible for any bad debts. TDI will provide monthly reports on the status of
the sale of the Authority's Hours and the collection of the fees relating
thereto. TDI makes no warranties or representations about the number of Hours
that will be sold or the hourly rate that will be achieved.
SECTION 3.09. RIGHT OF FIRST REFUSAL. Upon entering into each
Fractional Share Agreement, TDI shall assign to the Authority TDI's right of
first refusal to purchase each Fractional Share Owner's Fractional Share and to
purchase the Equipment all as set forth in the applicable Fractional Share
Agreement; provided, however that the Authority shall have no obligation to
purchase the Equipment or any Fractional Share. In the event the Authority
purchases any other Fractional Share, the Authority shall assume the Fractional
Ownership Agreement relating thereto, including the obligation to pay monthly
and hourly fees as set forth therein. The Authority hereby grants to TDI a right
of first refusal to acquire the Authority's Fractional Share. The Authority
shall not sell or otherwise transfer any interest in or to its Fractional Share,
other than to a related party, without first offering such Fractional Share to
TDI and granting TDI 60 days in which to purchase the Fractional Share at the
purchase price offered by a bona fide third party purchaser.
SECTION 3.10. LIENS. TDI covenants and agrees that on or before the
Transfer Date it shall cause the 1st Choice Lien to be paid in full and released
and otherwise, throughout the term of this Agreement, it shall not cause or
suffer to exist any Prohibited Lien and shall take any and all actions necessary
to release any Prohibited Lien.
SECTION 3.11. LOCATION. Except as set forth in Section 4.01, the
Equipment shall remain at the Center at all times during the term of this
Agreement and may not be moved without the prior written consent of the
Authority.
SECTION 3.12. SALE OF EQUIPMENT. The Equipment may be sold only upon a
determination by Fractional Share Owners owning all Fractional Shares. In the
event the Fractional Share Owners elect to sell the Equipment, TDI shall use
commercially reasonable efforts to sell the Equipment at the highest price then
available, but for not less than the amount, if any, designated by the
Fractional Share Owners. In the event of the sale of the Equipment, the proceeds
of such sale, less a sales commission of 3% of the sales price, but not less
than $40,000.00, payable to TDI, shall be distributed to each Fractional Share
Owner based on the number of Fractional Shares owned by such Fractional Share
Owner. TDI shall cause the Fractional Ownership Agreements to provide that the
Equipment may be sold as provided herein. TDI shall not receive such sales
commission if the Equipment is sold to the Authority or a related party thereof.
SECTION 3.13. COVENANTS OF TDI. TDI covenants and agrees that (a)
there shall be not more than seven Fractional Shares at any time and (b) the
Fractional Ownership Agreements shall provide that this Agreement and the
Fractional Ownership Agreements may be terminated on the terms and conditions
set forth in Section 9.01.
ARTICLE IV
DELAYS AND REMEDIES
SECTION 4.01. DELAYS IN CENTER AVAILABILITY. Availability of the
Premises for timely Equipment installation and subsequent FAA qualification is
critical to the sale of the Fractional Ownership Shares. No later than two weeks
after the date hereof, TDI shall provide the Authority with the Installation
Date, which shall not be earlier than 12 months after the date hereof. If the
Premises is not ready for installation of the Equipment on or prior to the
Installation Date, the Authority may postpone the Installation Date for up 30
days upon the payment to TDI of a penalty equal to $150,000, payable on the date
the Authority elects to postpone the Installation Date. The Authority shall
notify TDI if the Premises will not be ready on or before the Installation Date,
not less than seven days prior to the Installation Date. If the Premises is not
ready for installation of the Equipment at the end of any such postponement, the
Equipment shall be FAA certified at the TDI facility and remain there for not
less than 12 months, after which the Authority may, at its expense, instruct TDI
to relocate the Equipment to the Center. Timing of the relocation shall require
the concurrence of all Fractional Share Owners. In such event, TDI shall have no
obligation under the Lease until the Equipment is relocated to the Premises.
SECTION 4.02. DELAY IN EQUIPMENT AVAILABILITY. Should the Equipment
not be available on the Installation Date, TDI shall be liable under the
Lease and shall be liable for all other actual Center operating costs as if
the Equipment was installed as of the Installation Date.
SECTION 4.03. DELAY CONSULTATION. Each Party shall promptly inform the
other in writing and consult with the other as to any matter, which, in the
judgment of such Party, may be the cause of any delay in performance hereunder.
ARTICLE V
TAXES
SECTION 5.01. TDI'S OBLIGATIONS. TDI shall be responsible for
collecting and paying any applicable tax due on the sale of the six Fractional
Shares and all personal property tax with respect to the ownership or use of the
Equipment.
SECTION 5.02. THE AUTHORITY'S OBLIGATIONS. The Authority shall be
responsible for any applicable tax on the receipt of its one Fractional Share
and the sale of the Authority's Hours.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF TDI. TDI hereby
represents and warrants to the Authority as follows:
(a) TDI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado, with full
power and authority to own and operate its business, to execute and
deliver this Agreement, and to carry out the transactions contemplated
hereby.
(b) All requisite corporate actions for the execution,
delivery, performance and satisfaction by TDI of this Agreement have
been duly performed and/or obtained. This Agreement has been duly
executed and delivered by TDI and is a legal, valid and binding
obligation of TDI, enforceable in accordance with its terms, except to
the extent that such enforcement may be subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws of
general application affecting the rights and remedies of creditors or
secured parties, and the availability of equitable remedies including
specific performance and injunctive relief may be subject to equitable
defenses and the discretion of the court before which any proceedings
therefor may be brought.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not (a)
violate TDI's Articles of Incorporation or bylaws; (b) violate any
Legal Requirements applicable to TDI; (c) conflict with, or result in
any breach of, or default under, the terms, conditions or provisions of
any agreement or instrument to which TDI is a party or by which its
business or its assets are bound; or (d) result in the creation or
imposition of any Lien on the Equipment, except for the Lien granted to
1st Choice Bank.
SECTION 6.02. REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY. The
Authority hereby represents and warrants to TDI as follows:
(a) The Authority is a nonprofit corporation duly organized,
validly existing and in good standing under the laws of the State of
Colorado, with full power and authority to own and operate its
business, to execute and deliver this Agreement, and to carry out the
transactions contemplated hereby and thereby.
(b) All requisite corporate actions for the execution,
delivery, performance and satisfaction by the Authority of this
Agreement have been duly performed and/or obtained. This Agreement has
been duly executed and delivered by the Authority and is a legal, valid
and binding obligation of the Authority, enforceable in accordance with
its terms, except to the extent that such enforcement may be subject to
applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws of general application affecting the rights and remedies
of creditors or secured parties, and the availability of equitable
remedies including specific performance and injunctive relief may be
subject to equitable defenses and the discretion of the court before
which any proceedings therefor may be brought.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not (a)
violate the Authority's Articles of Incorporation or bylaws; (b)
violate any Legal Requirements applicable to the Authority; (c)
conflict with, or result in any breach of, or default under, the terms,
conditions or provisions of any agreement or instrument to which the
Authority is a party or by which its business or its assets are bound;
or (d) result in the creation or imposition of any Lien on the
Equipment.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. TDI INDEMNIFICATION. TDI agrees to indemnify and hold
harmless the Authority and its affiliates, stockholders, directors, officers,
employees, agents, successors and assigns from and against any and all Claims to
the extent such Claims are based upon, arise out of or relate to (i) any
untruthful or inaccurate representation or any breach of any warranty or any
failure to perform or comply with any of the covenants, conditions or agreements
of TDI set forth in this Agreement, and (ii) the assertion of any claim or legal
action against the Authority or its affiliates, stockholders, directors,
officers, employees, agents, successors and assigns by any person based upon,
arising out of or relating to any negligent or willful act or omission of TDI at
the Center or in connection with the use of the Equipment, excluding special,
consequential, punitive and other similar damages.
SECTION 7.02. ASSERTION OF CLAIMS.
(a) If a party entitled to indemnification hereunder (the
"Indemnitee") believes that it has incurred a Claim, it shall notify
the party from whom indemnification is sought (the "Indemnitor")
promptly in writing describing such Claim with reasonable particularity
and containing a reference to the provisions of this Agreement under
which such Claim has arisen.
(b) Neither this Article VII, nor any other provision of this
Agreement, is intended to confer any third party beneficiary rights,
including but not limited to any extension of any statutes of
limitations pertaining to suits, actions or proceedings brought by
third parties.
SECTION 7.03. NOTICE OF AND RIGHT TO DEFEND THIRD PARTY CLAIMS.
Promptly, upon receipt of notice of any claim or the commencement of any suit,
action or proceeding by a third party in respect of which indemnification may be
sought on account of an indemnification agreement contained in this Article VII,
the Indemnitee shall give notice in writing to the Indemnitor. Except to the
extent that the Indemnitor is prejudiced thereby, the omission of the Indemnitee
so to notify promptly the Indemnitor of any such claim or action shall not
relieve the Indemnitor from any liability which it may have to the Indemnitee in
connection therewith. In case any claim shall be asserted or suit, action or
proceeding commenced against the Indemnitee, the Indemnitor will be entitled to
participate therein, and, to the extent that it may wish, to assume the defense,
conduct or settlement thereof. After notice from the Indemnitee to the
Indemnitor of its election so to assume the defense, conduct or settlement
thereof, the Indemnitor will not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in connection with the
defense, conduct or settlement thereof. The Indemnitee will cooperate with the
Indemnitor in connection with any such claim assumed by the Indemnitor to make
available to the Indemnitor all pertinent information under the Indemnitee's
control.
ARTICLE VIII
COVENANTS
SECTION 8.01. THE AUTHORITY PERSONNEL. The Authority shall ensure that
any of its employees or independent contractors who operate the Equipment
receive training by TDI and operate the Equipment in accordance with the Owners
Manuals. TDI shall provide all necessary initial training to the Authority's and
the College's employees and independent contractors who will, from time to time,
operate or use the Equipment, at no cost to the Authority. The Authority and TDI
will use reasonable efforts to ensure that a sufficient number of the
Authority's and the College's employees and independent contractors are properly
trained on or before the Qualification Date. The Authority shall be liable for
any damages actually incurred by TDI as a result of the Authority's use of
personnel who are not trained for the task they are performing in connection
with the operation of the Equipment.
SECTION 8.02. INTELLECTUAL PROPERTIES. The Authority agrees that the
ownership of the copyright in and all other intellectual property rights in the
Equipment, documentation, specifications and Software shall remain at all times
vested in TDI. The Authority shall not record, reproduce, duplicate or in any
way copy, sell, disclose or divulge the same or any information relating thereto
to any third party. The Authority undertakes to impose restrictions in the same
form upon its employees, agents or any other persons having access to TDI's
copyright or other intellectual property rights pursuant to this Agreement. TDI
agrees to be bound by the same conditions set forth in this Section 8.02 with
respect to any intellectual properties of the Authority that are so identified.
SECTION 8.03. COMPLIANCE WITH LAW. In the performance of their
respective obligations hereunder, each Party shall comply with all applicable
Legal Requirements (and when requested by one Party, shall furnish proof of such
compliance within 72 hours).
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION. This Agreement may be terminated:
(a) at any time by mutual consent of the Authority and TDI; or
(b) in whole or in part by the owners of all Fractional Shares
immediately upon written notice to TDI upon (i) the filing of any
petition by TDI under any provision of the federal Bankruptcy Code or
any state law relating to insolvency; (ii) the filing of any such
petition against TDI, unless such petition and all proceedings
thereunder are dismissed within 60 days from such filing; (iii) the
appointment of a trustee or receiver for all or any assets of TDI,
unless such appointment is vacated or dismissed within 60 days from the
date of such appointment; or (iv) an adjudication that TDI is insolvent
or bankrupt; provided, however, that this Agreement may not be
terminated if TDI is not in breach of
any of its obligations under this Agreement; or
(c) in whole or in part by the owners of all Fractional Shares
immediately upon written notice to TDI if TDI is in material breach or
material default of its covenants and agreements under this Agreement,
or if any of its representations or warranties are not true in all
material respects and either (i) TDI does not cure such breach or
default within 30 days after notice thereof is delivered in writing
(ii) if such breach or default is not capable of cure within such
30-day period, TDI does not commence a good faith effort to cure such
breach or default within such 30-day period and continue in good faith
until such breach or default is cured.
TDI shall cause the Fractional Ownership Agreements to provide that
such agreements may be terminated on terms substantially similar to the terms
set forth in this Section 9.01.
SECTION 9.02. EFFECTS OF TERMINATION.
(a) In the event of termination of this Agreement pursuant to
Section 9.01, all obligations of the parties hereunder shall terminate,
except for the obligations set forth in Section 10.13
(confidentiality), Article VII (indemnification), and this Section
9.02, each of which shall remain in effect.
(b) Termination of this Agreement pursuant to Section 9.01 or
otherwise shall not affect the Authority's ownership rights in and to
its Fractional Share.
(c) Nothing in this Section 9.02 or elsewhere in this
Agreement shall (i) be deemed to release either Party from any
liability for any breach by such Party of the terms and provisions of
this Agreement or any failure by such party to perform its obligations
hereunder or (ii) to impair the right of either Party to pursue all
legal remedies for breach of contract and actual damages relating
thereto.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. ENTIRE AGREEMENT. The Parties agree that this Agreement
constitutes the entire agreement between the Parties with respect to the subject
matter hereof and supersedes all prior understandings and agreements with
respect thereto.
SECTION 10.02. PARTIES OBLIGATED AND BENEFITED. Subject to the
limitations set forth below, this Agreement will be binding upon the Parties and
their respective assigns and successors in interest and will inure solely to the
benefit of the parties and their respective assigns and successors in interest,
and no other person will be entitled to any of the benefits conferred by this
Agreement. Without the prior written consent of the other parties, which consent
shall not be unreasonably withheld, no Party will assign any of its rights under
this Agreement or delegate any of its duties under this Agreement; provided,
however, that the Authority may assign its rights hereunder to use the Equipment
and to receive training to Aims Junior College District and may
otherwise assign its right hereunder to any party which purchases all or any
part of the Authority's Ownership Interest.
SECTION 10.03. NOTICES. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be delivered
in person or mailed by first-class, certified or registered mail, return receipt
requested, postage prepaid, by reputable overnight mail or courier, with receipt
confirmed, or by telecopy if receipt is confirmed, addressed as follows:
If to the Authority: Aims Continuing Education Authority
Aims Community College
0000 X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attention: Office of the President
If to TDI: Training Devices Inc.
0000 Xxxxx Xxxxxx Xxxxxxx, Xxxx. #0X
Xxxxxxxxx, XX 00000-0000
Telephone Number: (000) 000-0000
Facsimile Number:(000) 000-0000
Attention: Xx. Xxxxx Xxxxxxxxx
or at such other address or addresses as may have been furnished in writing by
any party to the others in accordance with the provisions of this Section 10.03.
Notices and other communications provided in accordance with this
Section 10.03 shall be deemed delivered upon receipt. The furnishing of any
notice or communication required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice to persons designated above to receive copies shall in no way adversely
affect the effectiveness of such notice or communication.
SECTION 10.04. AMENDMENTS AND WAIVERS. Except as otherwise expressly
set forth in this Agreement, any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Parties. Any amendment or waiver effected in accordance
with this Section 10.04 shall be binding upon each Party. No waivers of or
exceptions to any term, condition or provision of this Agreement, in any one or
more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
SECTION 10.05. SEVERABILITY. If any provision of this Agreement shall
be held or deemed to be, or shall in fact be, invalid, inoperative or
unenforceable because of the conflict of such provision with any constitution or
statute or rule or public policy or for any other reason, such circumstance
shall not have the effect of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable, but this Agreement shall be
reformed and
construed as if such invalid, inoperative or unenforceable provision had never
been contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted.
SECTION 10.06. SECTION HEADINGS AND TERMS. The section headings in this
Agreement are for convenience and reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement. Terms used with
initial capital letters will have the meaning specified, applicable to both
singular and plural forms, for all purposes of this Agreement. The word
"include" and derivatives of that word are used in this Agreement in an
illustrative sense rather than limiting sense.
SECTION 10.07. MULTIPLE COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, and shall become
effective when counterparts which together contain the signatures of each Party
hereto shall have been delivered to the Parties. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart.
SECTION 10.08. ARBITRATION AND JURISDICTION.
(a) If any controversy or claim arising out of or relating to
this Agreement or any related agreement shall not be resolved in 30
days, then any claim, controversy or dispute, whether sounding in
contract, statue, tort, fraud, misrepresentation or other legal theory,
between or among the parties shall be resolved by arbitration in
Greeley, Colorado. The Federal Arbitration Act, 9 U.S.C. Sects. 1-15,
not state law, shall govern the arbitrability of all claims. The
arbitration shall be conducted by a single arbitrator of the Judicial
Arbiter Group under its then current rules. The arbitrator's award
shall be final and binding and may be entered in any court having
jurisdiction thereof. The prevailing party, as determined by the
arbitrator, shall be entitled to an award of reasonable attorneys' fees
and costs. It is expressly agreed that either party may seek injunctive
relief of the confidentiality provisions hereunder in an appropriate
court of law or equity pending an award in arbitration.
(b) The existence and details of any arbitration proceedings
between the parties pursuant to this Section 10.08, and any documents
generated in connection with such arbitration proceedings, shall be and
shall be kept private and confidential. The parties shall not divulge
such information to third parties, other than the parties' legal or
accounting advisers, or their bankers, or in connection with any
judicial proceedings or as otherwise required by law.
SECTION 10.09. PERFORMANCE NOT CONTRARY TO LAW. Nothing herein shall be
construed to require the performance by either party of any act contrary to law;
and, in the event of conflict between any provision hereof and any law or
governmental regulation, the latter shall prevail; and such event, the affected
portions of this Agreement shall be deemed amended to the extent necessary to
conform to the requirements of such law or governmental regulation.
SECTION 10.10. ATTORNEYS' FEES. In the event any proceeding is
brought by one party against the other to enforce or for the breach of any of
the provisions of this Agreement, the prevailing party shall be entitled in
such proceedings and in any appeal therefrom to recover reasonable attorneys'
fees, together with the costs of such proceeding therein incurred.
SECTION 10.11. COUNTERPART FACSIMILE EXECUTION. For purposes of
executing this Agreement, a document signed and transmitted by facsimile
machine or telecopier is to be treated as an original document. The signature
of any party thereon, for purposes hereof, is to be considered as an original
signature, and the document transmitted is to be considered to have the same
binding effect as an original signature on an original document. At the
request of any party, any facsimile or telecopy document is to be re-executed
in original form by the parties who executed the facsimile or telecopy
document. No party may raise the use of a facsimile machine or telecopier or
the fact that any signature was transmitted through the use of a facsimile or
telecopier machine as a defense to the enforcement of this Agreement or any
amendment or other document executed in compliance with this Section.
SECTION 10.12. GOVERNING LAW. This Agreement shall be governed by
and interpreted in accordance with the substantive laws of the State of
Colorado without regard to its provisions on conflict of laws.
SECTION 10.13. CONFIDENTIALITY. Each party shall treat as
proprietary all such information specifically identified and marked as
"confidential," "proprietary," or words of similar import. Neither Party
shall disclosure any confidential or proprietary information relating to the
Center or the Equipment to any person not authorized to receive it without
the written consent of the other Party. The receiving Party shall only use
the information supplied by the disclosing Party to accomplish work covered
by this Agreement and for no other purpose. Neither Party shall be liable to
the other for confidential or proprietary information which (i) at time of
disclosure is in the public domain; (ii) after disclosure becomes part of the
public domain through no violation of this Agreement by the receiving Party;
(iii) as shown by written records, was in the possession of the receiving
Party prior to disclosure by the disclosing Party hereunder; (iv) hereafter
becomes available to the receiving Party from a third party having no
confidential obligation with respect thereto; or (v) is independently
developed by the receiving Party as shown by written records. Upon completion
or termination of this Agreement, if directed by the disclosing Party in
writing, all proprietary information shall be returned. Neither TDI nor the
Authority shall be liable for any inadvertent disclosure, publication, or
statement, provided it exercised the same degree of care it normally takes to
protect and safeguard its own proprietary information. Notwithstanding
anything to the contrary in this Agreement, TDI may describe this Agreement
and any related arrangements in documents filed with the Securities and
Exchange Commission or other securities regulatory agencies or documents sent
to shareholders of TDI. TDI may make this Agreement or related documents
exhibits to any registration statement of TDI filed with the Securities and
Exchange Commission.
SECTION 10.14. TRADEMARK OR TRADE NAME. Parties will not make any
use whatsoever of the corporate or trade name of a Party, or any of their
affiliates, or any of their respective trademarks, insignia, logo or
markings, or any portion thereof, including, but not limited to, any use in
connection with any advertising, promotion, publicity or other printed
material, without the
prior written consent of the Party. TDI will use its trademark name of
NEXUSim for this Center in all promotion, marketing, and advertising.
SECTION 10.15. PUBLICITY. Except in any filings with the Securities
and Exchange Commission, or in press releases designed for TDI shareholders
or possible investors in TDI, or in marketing the sale of Fractional
Ownership interests or the Authority's simulator Hours, the Parties shall not
in any manner advertise or publish or release for publication any statement
mentioning the other Party or the fact that the Parties have furnished or
contracted to furnish to the other Party items and/or services required by
this Agreement, or quote the opinion of any employees of the other Party,
unless the written consent of the other Party is first obtained.
SECTION 10.16. RISK OF LOSS. The risk of loss, damage or destruction
to the Equipment from fire, theft or other casualty or cause shall be borne
by TDI at all times up to Qualification Date. It is expressly understood and
agreed that in the event of any material loss or damage to the Equipment from
fire, casualty or other cause prior to the Qualification Date, TDI shall
notify the Authority of same in writing immediately. TDI shall maintain
appropriate insurance to cover the full replacement value of the Equipment,
together with consequential losses, including loss of profits that would be
incurred if the Equipment was damaged, destroyed or stolen, naming the
Authority as a third party insured.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first above written.
AIMS CONTINUING EDUCATION
AUTHORITY
By:
Date: ____________ Its:
TRAINING DEVICES INTERNATIONAL, INC.
By: Xxxxxx X. Xxxxxxxxx
Date: ____________ Its: Chief Executive Officer
Article I
DEFINITIONS....................................................................1
Article II
THE CENTER
Section 2.01. Management...................................................3
Section 2.02. Training Center..............................................4
Section 2.03. Center Lease.................................................4
Section 2.04. Center Operating Costs.......................................4
Section 2.05. Expanded Teaching Content....................................5
Article III
FRACTIONAL OWNERSHIP OF EQUIPMENT
Section 3.01. Gift of One Fractional Share.................................5
Section 3.02. Representation and Warranties................................5
Section 3.03. Management...................................................6
Section 3.04. FAA Qualification............................................6
Section 3.05. Maintenance..................................................6
Section 3.06. Insurance....................................................6
Section 3.07. Scheduling...................................................7
Section 3.08. Sale of the Authority's Hours................................7
Section 3.09. Right of First Refusal.......................................7
Section 3.10. Liens........................................................8
Section 3.11. Location.....................................................8
Section 3.12. Sale of Equipment............................................8
Section 3.13. Covenants of TDI.............................................8
Article IV
DELAYS AND REMEDIES
Section 4.01. Delays in Center Availability................................8
Section 4.02. Delay in Equipment Availability..............................9
Section 4.03. Delay Consultation...........................................9
Article V
TAXES
Section 5.01. TDI's Obligations............................................9
Section 5.02. The Authority's Obligations..................................9
Article VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties of TDI........................9
Section 6.02. Representations and Warranties of the Authority.............10
Article VII
INDEMNIFICATION
Section 7.01. TDI Indemnification.........................................10
Section 7.02. Assertion of Claims.........................................11
Section 7.03. Notice of and Right to Defend Third Party Claims............11
Article VIII
COVENANTS
Section 8.01. The Authority Personnel.....................................11
Section 8.02. Intellectual Properties.....................................11
Section 8.03. Compliance with Law.........................................12
Article IX
TERMINATION
Section 9.01. Termination.................................................12
Section 9.02. Effects of Termination......................................12
Article X
GENERAL PROVISIONS
Section 10.01. Entire Agreement............................................13
Section 10.02. Parties Obligated and Benefited.............................13
Section 10.03. Notices.....................................................13
Section 10.04. Amendments and Waivers......................................14
Section 10.05. Severability................................................14
Section 10.06. Section Headings and Terms..................................14
Section 10.07. Multiple Counterparts.......................................14
Section 10.08. Submission to Jurisdiction..................................14
Section 10.09. Performance Not Contrary to Law.............................15
Section 10.10. Attorneys' Fees.............................................15
Section 10.11. Counterpart Facsimile Execution.............................15
Section 10.12. Governing Law...............................................15
Section 10.13. Confidentiality.............................................15
Section 10.14. Trademark or Trade Name.....................................16
Section 10.15. Publicity...................................................16
Section 10.16. Risk of Loss................................................16
EXHIBIT A
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made as of this 14th day of
September, 1999, but is effective for all purposes as of the Commencement
Date, by and between AIMS CONTINUING EDUCATION AUTHORITY, a Colorado
nonprofit corporation, having its principal office and place of business at
0000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Landlord") and TRAINING
DEVICES INC., a Colorado corporation, having its principal office and place
of business at 0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxx #0X, Xxxxxxxxx, Xxxxxxxx
00000 (the "Tenant").
W I T N E S S E T H:
WHEREAS, Landlord intends to build the Building on the Land; and
WHEREAS, Landlord wishes to lease the Leased Premises within the
Building to Tenant, and Tenant wishes to lease the Leased Premises from
Landlord, all subject to and upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. For all purposes of this Lease, except as
otherwise expressly provided or unless the context otherwise requires, (a)
the terms defined in this Article shall have the meanings assigned to them in
this Article and include the plural as well as the singular, (b) all
accounting terms not otherwise defined herein shall have the meanings
assigned to them in accordance with GAAP, (c) all references in this Lease to
designated "Articles," "Sections" and other subdivisions are to the
designated Articles, Sections and other subdivisions of this Lease, and (d)
the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Lease as a whole and not to any particular Article, Section or
other subdivision.
"ADDITIONAL RENT" has the meaning set forth in Section 3.01(b).
"AFFILIATE" means any individual or Entity directly or indirectly
through one or more intermediaries controlling, controlled by or under common
control with a party. The term "control," as used in the immediately
preceding sentence, means, with respect to a corporation, the right to
exercise, directly or indirectly, fifty percent (50%) or more of the voting
rights of any class of the shares of the controlled corporation, and, with
respect to an entity that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or polices of the controlled entity.
"AWARD" means all compensation, sums or other value awarded, paid or
received by virtue of a total or partial Condemnation of the Leased Premises
(after deduction of all reasonable legal fees and other reasonable costs and
expenses, including, without limitation, expert witness fees, incurred by
Landlord in connection with obtaining any such award).
"BANKRUPTCY CODE" means Title 11 of the United States Code, as
amended.
"BUILDING" means the building to be built by Landlord in which the
Leased Premises are to be located, which building will be located on the
Land. The Building will contain approximately _______ square feet of Rentable
Area.
"BUILDING STANDARD" means the brand name, type, quantity or quality
of services, finishes, materials, supplies, equipment or other items which
are selected for or may be used in the Complex in Landlord's sole discretion.
"BUSINESS DAY" means any day other than Saturday, Sunday or any
other day on which banking institutions in the State of Colorado are
authorized by law or executive action to close.
"CASUALTY" has the meaning given such term in Section 9.01.
"CENTER" has the meaning ascribed thereto in the Training Center
Agreement.
"CLAIMS" has the meaning given such term in Section 7.01.
"COMMENCEMENT DATE" has the meaning ascribed thereto in the Training
Center Agreement.
"COMMON TENANT SHARED AREAS" has the meaning given such term within
the definition of "Rentable Area."
"COMPLEX" means the Building, the Land and all Parking Structures.
"CONDEMNATION" means, with respect to the Leased Premises, (a) the
exercise of any governmental power with respect to all or part of the Leased
Premises by a Condemnor of its power of condemnation; (b) a voluntary sale or
transfer of all or part of the Leased Premises by Landlord to any Condemnor,
either under threat of condemnation or while legal proceedings for
condemnation are pending; or (c) a taking or voluntary conveyance of all or
part of the Leased Premises, or any interest therein, or right accruing
thereto or use thereof, as the result or in settlement of any Condemnation or
other eminent domain proceeding affecting the Leased Premises, whether or not
the same shall have actually been commenced.
"CONDEMNOR" means any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.
"CONTRACTOR" has the meaning given such term in Section 8.08.
"CONTRACTOR'S INSURANCE CERTIFICATE" has the meaning given such term
in Section 8.08.
"CONTRACTOR'S LIABILITY COVERAGE" has the meaning given such term in
Section 8.08.
"DEFAULT" means any event, act or condition that with the giving of
notice or lapse of time, or both, would constitute an Event of Default.
"EMERGENCY SITUATIONS" means fire, any other Casualty, or any other
events, circumstances or conditions that threaten the safety or physical
well-being of the Leased Premises' occupants or employees or that involve the
risk of material property damage or loss.
"ENTITY" means any corporation, general or limited partnership,
limited liability company or partnership, stock company or association, joint
venture, association, company, trust, bank, trust company, land trust,
business trust, cooperative, any government or agency or political
subdivision thereof or any other entity.
"ENVIRONMENT" means soil, surface water, groundwater, land, stream,
sediment, surface or subsurface strata, ambient air, physical structures and
equipment, and where radon gas is present, the interior air of buildings.
"ENVIRONMENTAL LAWS" means any federal, state or local law, rule or
regulation (both present and future) dealing with the use, generation,
treatment, storage, disposal, or abatement of Hazardous Materials, including,
but not limited to: (a) the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 6091 ET SEQ., as amended;
(b) any so-called "Superfund" or "Superlien" law; and (c) or any federal,
state or local statute, law, ordinance, code, rule, regulation, order or
decree regulating, relating to, or imposing liability or standards of conduct
concerning, any Hazardous Materials, as now or at any time hereafter in
effect.
"ENVIRONMENTAL NOTICE" has the meaning given such term in
Section 4.03(a).
"ENVIRONMENTAL OBLIGATION" has the meaning given such term set forth
in Section 4.03(a).
"EVENT OF DEFAULT" has the meaning given such term in Section 11.01.
"EXTENDED TERM" has the meaning given such term in Section 2.02(b).
"FACILITY MORTGAGE" means, with respect to the Leased Premises, any
Lien by Landlord placed upon the Leased Premises in accordance with
Article XVII.
"FACILITY MORTGAGEE" means the holder of a Facility Mortgage.
"FIXTURES" means all equipment, machinery and other items of
property, now or hereafter permanently affixed to or incorporated into the
Leased Premises, including, without limitation, all of the items set forth on
EXHIBIT C hereto, as well as all lift systems, furnaces, boilers, heaters,
electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control, waste disposal,
air-cooling and air-conditioning systems and apparatus, sprinkler systems,
and fire and theft protection equipment, all of which, to the maximum extent
permitted by law, are hereby deemed by the parties hereto to constitute real
estate, together with all replacements, modifications, alterations and
additions thereto, but specifically excluding Tenant's Personal Property.
"GAAP" means U.S. generally accepted accounting principles
consistently applied.
"GOVERNMENT AGENCY" or "GOVERNMENT AGENCIES" means any court,
agency, authority, board (including, without limitation, environmental
protection, planning and zoning), bureau, commission, department, office or
instrumentality of any nature whatsoever of any governmental unit of the
United States, Colorado, any county, or any political subdivision of any of
the foregoing, whether now or hereafter in existence, having jurisdiction
over Tenant or the Leased Premises or any portion thereof.
"GROSS REVENUES" means all revenues and receipts of every kind
derived from operating the Leased Premises and parts thereof, including
without limitation, proceeds, if any, from business interruption or other
loss of income insurance. [USED ONLY IN SECTIONS 9.03]
"HAZARDOUS MATERIALS" means any substance or material, including
without limitation, any substance or material containing one or more of any
of the following: "hazardous material," "hazardous waste," "regulated
substance," "petroleum," "pollutant," "contaminant," or "asbestos," as such
terms are defined in any applicable Environmental Law, in such
concentration(s) or amount(s) as may impose cleanup, removal, monitoring or
other responsibility under any applicable Environmental Law, or which may
present a significant risk of harm to Tenant or any subtenants, employees,
licensees, invitees or guests of the Leased Premises.
"IMPOSITIONS" means, collectively, all taxes (including, without
limitation, all AD VALOREM, sales and use, single business, gross receipts,
transaction, privilege, rent or similar taxes as the same relate to or are
imposed upon the Leased Premises, Tenant or the business conducted upon the
Leased Premises), assessments, water, sewer or other rents and charges,
excises, tax levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees) and all other governmental
charges, in each case whether general or special, ordinary or extraordinary,
usual or unusual, foreseen or unforeseen, of every character in respect of
the Leased Premises or the business conducted thereon by Tenant (including
all interest and penalties thereon due to any failure in payment by Tenant),
which at any time during or in respect of the Term hereof may be charged,
laid, levied, assessed or imposed on or in respect of or be a Lien upon: (a)
Landlord's interest in the Leased Premises; (b) the Leased Premises, any part
thereof, and/or the sidewalks and streets in front of same or any vaults
thereunder, or any fixtures, machinery and equipment owned by Tenant thereon
or therein or any part thereof, any rent therefrom, or any estate, right,
title or interest therein; or (c) any occupancy, operation, use or possession
of, or sales from, or activity conducted on or in connection with the Leased
Premises or the leasing or use of the Leased Premises or any part thereof by
Tenant.
"INDEBTEDNESS" means all obligations, contingent or otherwise,
which, in accordance with
GAAP, should be reflected on the obligor's balance sheet as debt.
"INITIAL TERM" has the meaning given such term in Section 2.02(a).
"INSURANCE REQUIREMENTS" means all terms of any insurance policy
required by this Lease and all requirements of the issuer of any such policy.
"LAND" means that certain tract of land containing approximately
_____ acres located in Greeley, ____ County, Colorado, as more particularly
described on EXHIBIT A attached hereto.
"LANDLORD" means Aims Continuing Education Authority, a Colorado
nonprofit corporation, and its successors and assigns.
"LANDLORD INDEMNITEE" or "LANDLORD INDEMNITEES" has the meaning
given such term in Section 4.03(c).
"LEASE" means this Lease Agreement dated as of ________, 1999,
between Landlord and Tenant.
"LEASED PREMISES" means the approximately 4,000 square feet on the
__ floor of the Building, which area is cross-hatched on the floor plan
attached hereto as EXHIBIT B. The Leased Premises are hereby stipulated to
contain ______ square feet of Rentable Area, which includes Tenant's occupied
space plus Tenant's allocable portion of Tenant Shared Areas.
"LEGAL REQUIREMENTS" means all applicable federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
and ordinances, and all applicable judicial, administrative and regulatory
judgments, decrees and injunctions, affecting Tenant or the Leased Premises
or the maintenance, construction, alteration or operation thereof, whether
now or hereafter enacted or in existence, including, without limitation, (a)
all permits, licenses, certificates of need, authorizations and regulations
necessary to operate the Leased Premises for its Primary Intended Use, and
(b) all covenants, agreements, restrictions and encumbrances contained in any
instruments either of record or actually known to Tenant (other than
encumbrances hereafter created by Landlord without the consent of Tenant) at
any time in force affecting the Leased Premises, including those which may
(i) require material repairs, modifications or alterations in or to the
Leased Premises, or (ii) in any way materially adversely affecting the use
and enjoyment thereof.
"LICENSES" means all licenses, operating permits and other
governmental authorizations and all contracts with governmental or
quasi-governmental entities, that may be necessary for the operation of the
Center.
"LIEN" means any mortgage, security interest, pledge, collateral
assignment, or other encumbrance, lien or charge of any kind (including,
without limitation, any easements, covenants, conditions and restrictions),
or any transfer of any property or assets for the purpose of subjecting the
same to an encumbrance, lien or charge securing the payment of Indebtedness
or performance of any other obligation in priority to payment of any Person's
general creditors.
"MINIMUM RENT" has the meaning given such term in Section 3.01(a).
"MONTHLY TERM" has the meaning given such term in Section 2.02(c).
"NOTICE" or "NOTICES" has the meaning given such term in
Section 17.08.
"PARKING STRUCTURE" means the parking facility and all improvements
thereto, to be located on a portion of the Land.
"PERMITTED LIENS" means: (a) this Lease; (b) all rights,
restrictions and easements of record as of the Commencement Date acceptable
to Landlord; (c) any Facility Mortgage; (d) security interests securing the
purchase price of equipment or personal property acquired by Tenant before or
after the Commencement Date; PROVIDED, HOWEVER, that (i) any such Lien
described in this clause (d) shall at all times be confined solely to the
asset in question, and (ii) the aggregate principal amount of Indebtedness
secured by any such Lien described in this clause (d) shall not exceed the
cost of acquisition of the property subject thereto; and (e) any other Liens
as may have been consented to in writing by Landlord.
"PERSON" means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so requires.
"PLANS AND SPECIFICATIONS" has the meaning given such term in
Section 5.06(a)(v).
"PRIMARY INTENDED USE" has the meaning given such term in
Section 4.01(a).
"REAL ESTATE TAXES" means all real estate taxes, including general
and special assessments and impact fees, if any, which are imposed upon or
relate to the Land and any improvements thereon (including the Leased
Premises), including without limitation, the following:
(a) any franchise, corporate, estate, inheritance,
succession or capital levy imposed on Landlord;
(b) special assessments (regardless of when due or whether
they are paid as a lump sum or in installments over time) imposed
because of facilities that are constructed by or on behalf of the
assessing jurisdiction (i.e., roads, sidewalks, sewers, culverts,
etc.) which directly benefit the Leased Premises or any part thereof
(regardless of whether or not they also benefit other buildings);
(c) impact fees (regardless of when due or whether they are
paid as a lump sum or in installments over time) that are required
of Landlord as a condition to the issuance of site plan approval,
zoning variances or building permits; and
(d) tax-increment financing or similar financing whereby
the municipality or other taxing authority has assisted in financing
the construction of the Leased Premises or any part thereof by
temporarily reducing or abating normal impositions in return for
substantially higher levels of impositions at later dates.
"RENT" or "RENTS" means, collectively, the Minimum Rent and all
items of Additional Rent payable by Tenant to Landlord pursuant to the
provisions of this Lease.
"RENT DAY" means any day on which Rent is due and payable pursuant
to Article III.
"RENTABLE AREA" means the rental square footage within the Complex,
including without limitation, the following:
(a) in the case of a single-tenancy floor, all floor area
measured from the inside surface of the outer glass line or exterior
wall of the Building (including balcony areas) forming a part of the
Leased Premises even though all or a part of the area of such
balconies might extend past the glass line) to the inside surface of
the opposite outer wall, excluding only those areas within the
outside walls used for Building stairs, fire towers, elevator
shafts, flues, vents, stacks, pipe shafts and vertical ducts, but
including any such areas which are for the specific use of Tenant,
such as special stairs or elevators, and
(b) in the case of a partial floor, all floor areas within
the inside surface of the outer glass line or exterior wall
enclosing the Tenant occupied portion of the floor (including
balcony areas forming a part of the Leased Premises even though all
or a part of the area of such balconies might extend past the glass
or exterior wall line) and measured to the midpoint of the demising
walls separating areas leased by or held for lease to other tenants
and from areas devoted to elevator foyers, rest rooms, mechanical
rooms, janitor closets, vending areas and other similar facilities
for the use of all tenants on the particular floor (the "Tenant
Shared Areas"), but including a part of the Tenant Shared Areas
located on such floor based upon the ratio which the Tenant's total
occupied portion of such floor bears to the aggregate occupiable
areas on such floor.
The Leased Premises also shall include any areas of the Complex
which are incorporated into the Leased Premises or which are reserved or
designated for exclusive use or occupancy by Tenant even though such areas
would have been classified as Tenant Shared Areas or Common Tenant Shared
Areas (defined herein) were it not for such reservation or designation
(including, without limitation, foyers, lobby areas, passageways and
bathrooms situated on the ground floor of any building and any balconies or
enclosed patios even though all or a part of such areas might extend past the
glass or exterior wall line of the Building of which they form a part). All
such areas shall be deemed Tenant occupied areas for purposes of any area
calculations described herein.
Rentable Area also shall include a portion of the areas in the
Complex which exist for the common benefit or use of all tenants or which are
occupied and used by Landlord to provide Building services and management
including, without limitation (if applicable), the management office, the
Building engineers office, the central mechanical room, postal and security
stations, lobby areas and interior passageways through the Complex not
reserved for the exclusive use of a specific tenant, and offices and rooms in
the Complex used by independent contractors such as the janitorial and
security service companies, and all other areas in the Complex similar
thereto (the "Common Tenant Shared Areas"). The total Rentable Area of the
Leased Premises shall be the Rentable Area of each floor of the Leased
Premises as calculated in (a) and (b) above plus a
portion of the Common Tenant Shared Areas based upon the ratio which the
Rentable Area of the Leased Premises (excluding the Common Tenant Shared
Areas) bears to the total net rental Area of the Complex (excluding the
Common Tenant Shared Areas). No deductions from Rental Area are made for
columns or other projections. The Rentable Area in the Leased Premises has
been calculated on the basis of the foregoing definition and is stipulated
for all purposes hereof to be the number of square feet as shown in EXHIBIT B
hereto (this calculation includes Tenant's occupied portion of each floor
plus Tenant's share of Tenant Shared Area and Common Tenant Shared Areas),
whether the same should be more or less as a result of minor variations
resulting from actual construction and completion of the Leased Premises for
occupancy so long as such work is done in accordance with the terms and
provisions hereof.
"REPLACEMENT COST" means the actual replacement cost of the Leased
Premises requiring replacement from time to time, including an increased cost
of construction endorsement, if available, and the cost of debris removal
less exclusions provided in the standard form of fire insurance policy.
Landlord shall have the right to have such full Replacement Cost redetermined
by an independent accredited appraiser and the determination of such
appraiser shall be final and binding on the parties hereto.
"SECURITY DEPOSIT" has the meaning given such term in
Section 3.01(b)(vi).
"SPECIFICATIONS" means the specifications and standards attached
hereto as Exhibit D.
"SUCCESSOR LANDLORD" has the meaning given such term in Section 16.02.
"TENANT" means Training Devices Inc., a Colorado corporation, its
successors and assigns, and any Person with which such company may be merged
or consolidated.
"TENANT CHANGE" or "TENANT CHANGES" has the meaning given such term
in Section 5.05(a).
"TENANT'S PERSONAL PROPERTY" means all tangible and intangible
personal property now owned, leased or hereafter acquired by Tenant on or
after the date hereof, not affixed to the Leased Premises, and all contracts
and agreements to which Tenant is a party used in the operation of the Center.
"TENANT'S PROPORTIONATE SHARE" means a fraction, the numerator of
which is the Rentable Area of the Leased Premises and the denominator of
which is the total Rentable Area of the Building, stipulated herein to be
_____ square feet.
"TENANT SHARED AREAS" has the meaning given such term within the
definition of "Rentable Area."
"TERM" has the meaning given such term in Section 2.02(a), unless
sooner terminated pursuant to the terms of this Lease.
"TRAINING CENTER AGREEMENT" means that certain Training Center and
Fractional
Ownership Agreement dated as of ________, 1999, between Landlord and Tenant.
"UNAVOIDABLE DELAY" means delay due to strikes, acts of God, force
majeure, governmental restrictions or actions (including the revocation or
refusal to grant Licenses or permits, where such revocation or refusal is not
due to the fault of the party whose performance is excused by reason of such
Unavoidable Delay), enemy action, civil commotion, fire, unavoidable
Casualty, Condemnation or other comparable causes beyond the reasonable
control of Landlord or Tenant; PROVIDED, HOWEVER, that lack of funds shall
not be deemed a cause beyond the reasonable control of a party, unless such
lack of funds is caused by the breach of the other party's obligations under
this Lease.
"UNSUITABLE FOR PRIMARY INTENDED USE" means a state or condition of
the Leased Premises such that: (a) following any damage or destruction
involving the Leased Premises, the Leased Premises cannot reasonably be
expected to be restored within six (6) months following such damage or
destruction to substantially the same condition as existed immediately before
such damage or destruction; or (b) as the result of a partial taking by
Condemnation, the Leased Premises cannot be operated on a commercially
practicable basis for their Primary Intended Use, taking into account, among
other relevant factors, the amount of square footage and the revenues
affected by such damage, destruction or partial taking.
"UTILITY CHARGES" has the meaning given such term in
Section 3.01(b)(iii).
ARTICLE II
LEASED PREMISES AND TERM
SECTION 2.01. THE LEASED PREMISES. Upon and subject to the terms and
conditions hereinafter set forth, and subject to the rights of any Facility
Mortgagee, Landlord hereby leases the Leased Premises (including the
Fixtures) to Tenant for the Term, and Tenant hereby leases the Leased
Premises (including the Fixtures) from Landlord for the Term, effective upon
the Commencement Date.
SECTION 2.02. TERM OF LEASE.
(a) TERM. The term of this Lease (the "Term") shall
commence on the Commencement Date and shall terminate on the last
day of the tenth year after the Commencement Date (such period, the
"Initial Term"), unless sooner terminated pursuant to the terms of
this Lease or extended pursuant to Section 2.02(b) herein.
(b) EXTENSION. So long as there is no Default or Event of
Default hereunder, Tenant still occupies the Leased Premises and
Landlord consents to the exercise thereof, which consent may be
withheld in Landlord's sole and absolute discretion, Tenant shall
have one (1) option to extend the Initial Term of this Lease for
five (5) additional years commencing on the first day after the
expiration of the Initial Term (such period, the "Extended Term").
Such Extended Term shall be on the same terms and conditions as set
forth herein; PROVIDED, HOWEVER, that the Minimum Rent for such
Extended Term shall be
increased as set forth in Section 3.01(a) below. If Tenant shall
elect to exercise its option to extend the Term of this Lease as set
forth herein, Tenant shall do so by giving written notice thereof to
Landlord not less than ninety (90) days prior to the expiration of
the Initial Term of this Lease. Any references to "Term" shall
include the Initial Term of this Lease, the permitted Extended Term
hereunder, the permitted Monthly Term hereunder and, subject to the
terms of Article XII, any period of holding over by Tenant.
(c) MONTHLY TERM. So long as there is no Default or Event
of Default hereunder and Tenant still occupies the Leased Premises,
at the end of the Initial Term or at the end of the Extended Term
(if applicable), Tenant shall have the option of leasing the Leased
Premises on a month-to-month basis for a period of up to six (6)
months (such period, the "Monthly Term"). Such Monthly Term shall be
on the same terms and conditions as set forth herein; PROVIDED,
HOWEVER, that the Minimum Rent for such Monthly Term shall be as set
forth in Section 3.01(a) below; and FURTHER PROVIDED that the Leased
Property's Primary Intended Use during such Monthly Term shall be
limited to the use and operation of one Beech 1900 D Level C Full
Flight Simulator in the Leased Premises. If Tenant elects to
exercise its option for a monthly tenancy as set forth herein,
Tenant shall do so by giving written notice thereof to Landlord not
less than _____ (__) days prior to the expiration of the Initial
Term or Extended Term (if applicable) of this Lease.
(d) NO CANCELLATION.
(i) After the Commencement Date, Tenant shall have
no right, and hereby waives any right, to cancel or
terminate this Lease, to seek a diminution of rent, xxx for
damages, or assert any other contractual, legal or equitable
remedy based either on a claim that Landlord failed to
deliver possession in accordance with the terms of this
Lease or based on a claim that the size, location, layout,
dimensions or construction of the Leased Premises or any
other building, the service area (if any), sidewalks,
parking or any other facilities were not furnished in
accordance with the terms of this Lease.
(ii) On the Commencement Date, Tenant shall be
deemed to have certified to Landlord that the Leased
Premises has been delivered to Tenant in accordance with the
terms of this Lease and that possession thereof has been
accepted, fully and completely, by Tenant who is then in
possession of the same, and that there is not then any
offset of any Rents nor any violation of any of the Lease
terms on the part of Landlord. The foregoing provisions
shall be self-operative and no further instrument, letter,
or certificate shall be required by Landlord or any Facility
Mortgagee unless such parties shall deem the same
appropriate, in which event, in confirmation of the
foregoing, upon written request, Tenant promptly shall
execute, in writing, a certificate containing the foregoing
provisions, including the Rents, and the commencement and
expiration dates of the Term of this Lease.
SECTION 2.03. INCOME AND EXPENSES. Except as otherwise set forth
herein, this Lease
shall be a "triple net" lease and Tenant shall be entitled to all income and
shall be responsible for the payment or settlement of all expenses of the Leased
Premises accruing on and after the Commencement Date and until the expiration or
earlier termination of the Term.
SECTION 2.04. CONDITION OF LEASED PREMISES. Landlord and Tenant
acknowledge that the Leased Premises will be constructed in accordance with the
plans set forth on Exhibit B and that the Leased Premises shall be in accordance
with the Specifications. Tenant accepts the Leased Premises in its "as is"
condition as of the Commencement Date, subject to the rights of Landlord, the
existing state of title, including all covenants, conditions, restrictions,
reservations, mineral leases, easements and other matters of record or that are
visible or apparent on the Leased Premises, all applicable Legal Requirements,
the lien of financing instruments, mortgages and deeds of trust, and such other
matters which would be disclosed by an inspection of the Leased Premises and the
record title thereto or by an accurate survey thereof, and all other Permitted
Liens. TENANT REPRESENTS THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
LEASE, IT IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF LANDLORD OR
LANDLORD'S AGENTS OR EMPLOYEES WITH RESPECT TO THE CONDITION OF THE LEASED
PREMISES, AND EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE, TENANT
WAIVES ANY CLAIM OR ACTION AGAINST LANDLORD IN RESPECT THEREOF. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE, LANDLORD MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PREMISES OR ANY
PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE
TO BE BORNE BY TENANT.
ARTICLE III
RENTS
SECTION 3.01. RENTS.
(a) MINIMUM RENT. Tenant covenants to pay to Landlord as
set forth in Section 3.02, without previous demand therefor and without
any delay, defense, set-off, deduction or abatement whatsoever, a
minimum rent (the "Minimum Rent") in the following amounts: (i) for
years one through four of the Initial Term, $127,000 per year,
payable in (A) one monthly installment of $10,583.37 followed by (B)
eleven equal monthly installments of $10,583.33, each installment
payable in advance on the first day of each and every calendar
month, with the first installment of year one for $10,583.37 due on
the Commencement Date; (ii) for years five through seven of the
Initial Term, $137,000 per year, payable in (A) one monthly
installment of $11,416.74 followed by (B) eleven equal monthly
installments of $11,416.66, each installment payable in advance on
the first day of each and every calendar month; (iii) for years
eight through ten of the Initial Term, $147,000 per year, payable in
twelve equal monthly installments of $12,250.00, each installment
payable in advance on the first day of each and every
calendar month; (iv) for the Extended Term, $147,000 per year
increased by the cumulative consumer price index for the prior
five years, payable in twelve equal monthly installments in
advance on the first day of each and every calendar month of the
Extended Term; and (v) for the Monthly Term, the Minimum Rent in
effect at the time the option granted to Tenant in Section 2.02(c)
is exercised.
(b) ADDITIONAL RENT. Tenant shall pay, as additional rent
("Additional Rent"), all charges, costs, expenses and other payments
which Tenant assumes or agrees to pay under any of the provisions of
this Lease, including without limitation, the following:
(i) IMPOSITIONS. Tenant shall pay or cause to be paid
Tenant's Proportionate Share of the Impositions attributable
to any period during the Term before any fine, penalty,
interest or cost (other than any opportunity cost as a result
of a failure to take advantage of any discount for early
payment) may be added for nonpayment. Within thirty (30) days
after receipt of written Notice of the amount of Tenant's
Proportionate Share of the Impositions, Tenant shall pay such
amount to Landlord. Landlord, at its expense, to the extent
required or permitted by Legal Requirements, shall prepare and
file all tax returns required to be filed by Landlord, and
Tenant, at its expense, to the extent required or permitted by
Legal Requirements, shall prepare and file all tax returns and
reports required to be filed by Tenant in respect of any
Imposition as may be required by any Government Agency.
Provided that no Default or Event of Default shall have
occurred and be continuing, if any refund shall be due from
any taxing authority in respect of any Imposition paid by
Tenant, Tenant's Proportionate Share of such refund shall be
paid over to Tenant. Upon request of the other, Landlord and
Tenant each shall provide such data as is maintained by the
party to whom the request is made with respect to the Leased
Premises as may be necessary to prepare any required returns
and reports. In the event that Government Agencies classify
any portion of the Leased Premises covered by this Lease as
personal property, Tenant shall file all personal property tax
returns in such jurisdictions where it may legally be required
to so file. Upon request, each party shall provide, to the
extent it possesses the same, the other with cost and
depreciation records necessary for filing returns for any
portion of the Leased Premises so classified as personal
property. Landlord shall use its best efforts to give prompt
Notice to Tenant of all Impositions payable by Tenant
hereunder of which Landlord at any time has knowledge;
PROVIDED, HOWEVER, that Landlord's failure to give any such
Notice shall in no way diminish Tenant's obligation hereunder
to pay such Impositions.
Notwithstanding the provisions of this Section, in
the event that Landlord, in its sole discretion, determines
that it will deliver payment of any Impositions referred to in
this Section to the appropriate taxing or Government Agencies,
then, in such event, Landlord agrees to notify Tenant of the
delivery of payment of said Impositions by Landlord to the
appropriate taxing or Government Agencies and the amount of
Tenant's Proportionate Share of such Impositions so paid by
Landlord to the appropriate taxing or Government Agencies, and
the amount of Tenant's Proportionate Share of such Impositions
paid by Landlord on account of said Impositions thereafter
shall be reimbursed and paid by Tenant to Landlord on the next
succeeding Minimum Rent payment date and shall be added to the
next or any subsequent rent thereafter to become due as
Landlord elects and shall be collectible as such as Additional
Rent. It is understood and agreed by Landlord and Tenant that
notwithstanding Landlord's determination pursuant to this
Section to deliver the payment of said Impositions to the
appropriate taxing or Government Agencies, that the obligation
to pay Tenant's Proportionate Share of said Impositions during
the Term of this Lease shall be the obligation of Tenant
hereunder at all times whether said Impositions shall be paid
by Tenant directly to Landlord or reimbursed to Landlord as
stipulated herein if Landlord so elects. Furthermore, it
expressly is understood that payment by Landlord of any said
Impositions, whether pursuant to this Section or in the Event
of Default hereunder, shall not be deemed to waive or release
the obligation of Tenant to make payment for said Impositions
or to waive or release any rights of Landlord hereunder.
(ii) REAL ESTATE TAXES. Tenant shall deposit with
Landlord funds for the payment of Tenant's Proportionate Share
of Real Estate Taxes, as estimated by Landlord at the
commencement of the Term, payable in twelve (12) equal monthly
installments in advance on the first day of each and every
calendar month during the Term of this Lease; PROVIDED,
HOWEVER, that notwithstanding any provision contained herein,
upon Tenant's execution of this Lease, Tenant shall deposit
with Landlord funds for payment of Tenant's Proportionate
Share of the Real Estate Taxes for the Leased Premises for the
year 1999, based upon the 1998 Real Estate Taxes. At any time
during the Term, Landlord may re-estimate Tenant's Real Estate
Tax obligations and thereafter adjust Tenant's equal monthly
installments thereof. In the event that the laws of the State
of Colorado shall be altered so as to reduce or replace the
amount of the Real Estate Taxes on the Leased Premises and in
place thereof impose any tax, charge, or assessment against
the holder of any mortgage on the Leased Premises, or any
note, bond or other indebtedness secured thereby, or any tax
on this Lease or leasehold estate, then Tenant shall pay
Tenant's Proportionate Share of such tax, charge or assessment
as Additional Rent.
It is understood and agreed by and between Landlord
and Tenant that, at all times during the Term of this Lease,
Landlord shall have the right, but not the obligation, to
elect at its option, to challenge the assessed value of the
Leased Premises and/or to challenge the Real Estate Taxes
levied or assessed against the Leased Premises. In any such
event, Landlord shall be entitled to retain the services of
individuals or companies of its selection, including, but not
limited to, attorneys and appraisers to support such
challenge. It is understood and agreed that Landlord shall be
authorized to arrange for payment of such services as a
percentage of the reduction in the Real Estate Taxes payable
for the Leased Premises. Tenant agrees, as Additional Rent, to
reimburse Landlord for Tenant's Proportionate Share of any
such payments within ten (10) days of Landlord's
written demand for such payment.
(iii) UTILITY CHARGES. Landlord shall ensure that the
Leased Premises are wired to meet the electricity requirements
set forth in the Specifications. Landlord shall cause to be
installed a separate meter to measure the amount of
electricity used by the Leased Premises. Tenant shall pay or
cause to be paid promptly, as and when the same shall become
due and payable, all charges for electricity used by the
Leased Premises. [AND THE COSTS OF THE SEPARATE METER?]
Tenant shall pay or cause to be paid promptly, as and
when the same shall become due and payable, Tenant's
Proportionate Share of all water rents, rates and charges, all
sewer rents and all charges for power, gas, oil, heat, steam,
hot water and other utilities, including charges for repairing
and setting meters, supplied to the Leased Premises at anytime
during the Term of this Lease (collectively with electricity
charges, the "Utility Charges"). Tenant shall keep the Leased
Premises sufficiently heated so as to prevent freezing and
deterioration thereof and/or of the equipment and facilities
contained therein.
(iv) INSURANCE PREMIUMS. Tenant shall pay or cause to
be paid all premiums for insurance coverage required to be
maintained by Tenant pursuant to Article VIII.
(v) BUILDING SERVICES. Tenant shall pay or cause to
be paid Tenant's Proportionate Share of the building services
costs listed in Section 5.01.
(vi) OTHER CHARGES. Tenant shall pay or cause to be
paid all other amounts, liabilities and obligations that
Tenant assumes or agrees to pay under this Lease, including,
without limitation, all agreements to indemnify Landlord under
Sections 4.03(c) (Environmental), 5.02(b) (Legal Requirement
Compliance), 6.01 (Liens), 7.01 (Permitted Contests) and 8.08
(General Indemnification).
(vii) SECURITY DEPOSIT. On the Commencement Date,
Tenant shall pay to Landlord the sum of $_____ (the "Security
Deposit") which shall be held by Landlord for the performance
of Tenant's covenants and obligations under this Lease, it
being expressly understood that the Security Deposit shall not
be considered an advance payment of Rent or a measure of
Landlord's damage in case of Default hereunder by Tenant, and
shall be held by Landlord without payment of any interest
thereon. Upon the occurrence of any Event of Default by Tenant
under this Lease, without prejudice to any other remedy,
Landlord from time to time may use the Security Deposit to the
extent necessary to make good any arrears of Rents or to
repair any damage or injury or pay any expense or liability
incurred by Landlord as a result of an Event of Default or
breach of covenant, and any remaining balance of the Security
Deposit shall be returned by Landlord to Tenant upon the
termination of this Lease. If any portion of the Security
Deposit is so used or applied, Tenant shall deposit with
Landlord, upon ten (10) days' Notice from Landlord, by cash or
cashier's check an amount
sufficient to restore the Security Deposit to its original
amount. The Security deposit may be assigned and
transferred by Landlord to the Successor Landlord, and upon
acknowledgment by such Successor Landlord of receipt of
such security and its assumption of the obligation to
account to Tenant for such security in accordance with the
terms of this Lease, Landlord shall thereby be discharged
of any further obligation relating thereto.
(viii) PERFORMANCE BY LANDLORD. Except as otherwise
provided herein, in the event that Landlord shall pay any sum
of money, or do any act which shall require the expenditure of
any sums by reason of the failure of Tenant to perform any of
the covenants, terms or conditions herein contained, Tenant
covenants to repay promptly such sums with interest at the
rate of eighteen percent (18%) per annum, to Landlord upon
demand, and in Default thereof, the sums so paid by Landlord
and the interest thereon, may be added as Additional Rent to
the Minimum Rent becoming due upon the next Rent Day, or, at
Landlord's option, on any subsequent Rent Day and shall be
payable as such. Nothing contained herein, however, shall be
construed to postpone the right of Landlord, immediately upon
expending such sums, to collect such sums by action or
otherwise.
(ix) LATE CHARGES. If any installment of Minimum Rent
or Additional Rent (but only as to those Additional Rents that
are payable directly to Landlord) shall not be paid on its due
date, Tenant shall pay Landlord, on demand, as Additional
Rent, a late charge (to the extent permitted by law) equal to
five percent (5%) of the amount of such installment. To the
extent that Tenant timely pays any Additional Rent directly to
Landlord pursuant to any requirement of this Lease, Tenant
shall be relieved of its obligation to pay such Additional
Rent to the Entity to which it would otherwise be due.
In the event of any failure by Tenant to pay any
Additional Rent when due to any Entity other than Landlord,
Tenant shall promptly pay and discharge, as Additional Rent,
every fine, penalty, interest and cost that may be added by
the Entity to which such Additional Rents are due (other than
Landlord) for nonpayment or late payment of such items.
SECTION 3.02. PAYMENT OF RENT. Tenant, during the Term hereby granted,
shall pay to Landlord, at such place as it, in writing, shall designate, and to
such person, firm or corporation as Landlord, in writing, shall designate, or to
its assignee, the Minimum Rent and any Additional Rent due hereunder. Until
further notice from Landlord, said Minimum Rent and any Additional Rent shall be
paid by wire transfer of immediately available federal funds, on the date due,
to the account identified on SCHEDULE 3.02. [WANT WIRE PAYMENTS?]
SECTION 3.03. NET LEASE. The Rents shall be absolutely net to Landlord
so that this Lease shall yield to Landlord the full amount of the installments
or amounts of Rent throughout the Term, subject to any other provisions of this
Lease which expressly provide for adjustment or abatement of such Rent. It is
the intention of the parties that Landlord shall receive the Rents herein
reserved free from all taxes, charges, expenses, damages and deductions of every
description, and that Tenant shall pay all of the above items and expenses and
damages which, except for the execution and delivery of this Lease, would have
been chargeable against the Leased Premises and payable by Landlord.
SECTION 3.04. NO TERMINATION OR ABATEMENT. Except as otherwise
specifically provided in this Lease, Tenant, to the maximum extent permitted by
law, shall remain bound by this Lease in accordance with its terms and shall
neither take any action without the consent of Landlord to modify, surrender or
terminate this Lease, nor seek, nor be entitled to, any abatement, deduction,
deferment or reduction of the Rents, or set-off against the Rents, nor shall the
respective obligations of Landlord and Tenant be otherwise affected by reason of
(a) any damage to or destruction of the Leased Premises or any portion thereof
from whatever cause or any Condemnation; (b) the lawful, or unlawful prohibition
of, or restriction upon, Tenant's use of the Leased Premises, or any portion
thereof, or the interference with such use by any Person; (c) any claim that
Tenant may have against Landlord by reason of any default or breach of any
warranty by Landlord under this Lease or any other agreement between Landlord
and Tenant, or to which Landlord and Tenant are parties; (d) any bankruptcy,
insolvency, reorganization, composition, readjustment liquidation, dissolution,
winding up or other proceedings affecting Landlord or any assignee or transferee
of Landlord; or (e) any other cause whether similar or dissimilar to any of the
foregoing, other than a discharge of Tenant from any such obligations as a
matter of law; PROVIDED, HOWEVER, that the foregoing shall not apply or be
construed to restrict any other rights Tenant may have as a result of any act or
omission by Landlord constituting gross negligence or willful misconduct. Tenant
hereby waives all rights arising from any occurrence whatsoever, which may now
or hereafter be conferred upon it by law, to (i) modify, surrender or terminate
this Lease or quit or surrender the Leased Premises or any portion thereof, or
(ii) entitle Tenant to any abatement, reduction, suspension or deferment of the
Rents or other sums payable or other obligations to be performed by Tenant
hereunder, except as otherwise specifically provided in this Lease. The
obligations of Tenant hereunder shall be separate and independent covenants and
agreements, and the Rents and all other sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provision of this Lease.
Notwithstanding anything set forth in this Lease to the contrary, in any
instance where, after the occurrence of a Default or an Event of Default, this
Lease expressly permits Landlord to retain funds which, but for the Default or
Event of Default, would be payable to Tenant, Landlord shall refund such funds
to Tenant to the extent that the amount exceeds the amount estimated by Landlord
in good faith to be necessary to compensate Landlord for any cost, loss or
damage incurred or reasonably expected to be incurred in connection with such
Default or Event of Default.
ARTICLE IV
USE OF THE LEASED PREMISES
SECTION 4.01. PERMITTED USE.
(a) PRIMARY INTENDED USE. Tenant shall have the right, at all
times during the Term and at any other time that Tenant shall be in
possession of any Leased Premises, to use the Leased Premises for the
operation of a full flight simulator training center and for
such other uses as may be incidental or necessary thereto (such use
being hereinafter referred to as the Leased Premises' "Primary
Intended Use"). Tenant shall not use the Leased Premises or any
portion thereof for any use inconsistent with the Primary Intended Use
without the prior written consent of Landlord. Tenant shall not take
or omit to take any action, the taking or omission of which materially
impairs the value or the usefulness of the Leased Premises or any part
thereof for its Primary Intended Use.
(b) NECESSARY APPROVALS. Tenant shall proceed with all due
diligence and exercise commercially reasonable efforts to obtain and
maintain all Licenses necessary to use and operate, for its Primary
Intended Use, the Leased Premises and Leased Premises located thereon
under Legal Requirements and Landlord shall cooperate with respect to
obtaining any such Licenses, including joining in any application for
Licenses to the extent required by Legal Requirements.
(c) LAWFUL USE. Tenant shall not use, and shall use
commercially reasonable efforts to prohibit third parties from using,
the Leased Premises or Tenant's Personal Property for any unlawful
purpose. Tenant shall not commit, and shall use commercially reasonable
efforts not to suffer to be committed, any waste on the Leased
Premises, or in the Leased Premises, nor shall Tenant cause or permit
any nuisance thereon or therein. Tenant shall not use, and shall use
commercially reasonable efforts to prohibit third parties from using,
the Leased Premises or any portion thereof, including Tenant's Personal
Property, in such a manner as (i) might reasonably tend to impair
Landlord's (or Tenant's, as the case may be) title thereto or to any
portion thereof; or (ii) may reasonably make possible a claim or claims
for adverse usage or adverse possession by the public, or of implied
dedication of the Leased Premises or any portion thereof. Tenant shall
not use, and shall use commercially reasonable efforts to prohibit
third parties from using, the Leased Premises in any manner that will
cause the cancellation of any insurance policy covering the Leased
Premises or any part thereof (unless another adequate policy is
available), nor shall Tenant sell or otherwise provide to customers,
and shall use commercially reasonable efforts to prohibit third parties
from keeping, using or selling in or about the Leased Premises, any
article which may be prohibited by law or by the standard form of fire
insurance policies, or any other insurance policies required to be
carried hereunder, or fire underwriter's regulations.
SECTION 4.02. COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS. Subject
to the provisions of Article VII hereof, Tenant, at its sole expense, shall (a)
comply in all material respects with Legal Requirements and Insurance
Requirements in respect of the use, operation, maintenance, repair, alteration
and restoration of the Leased Premises; and (b) procure, maintain and comply in
all material respects with all appropriate Licenses, permits and other
authorizations and agreements required for any use of the Leased Premises and
Tenant's Personal Property then being made, and for the proper erection,
installation, operation and maintenance of the Leased Premises or any part
thereof.
SECTION 4.03. ENVIRONMENTAL MATTERS.
(a) RESTRICTIONS ON USE. Tenant shall not store, spill upon,
dispose of or
transfer to or from the Leased Premises any Hazardous Materials,
except that Tenant may store, transfer and dispose of Hazardous
Materials in compliance with all Environmental Laws. Tenant promptly
shall: (i) notify Landlord in writing of any material change in the
nature or extent of Hazardous Materials at the Leased Premises of
which Tenant has notice or actual knowledge; (ii) transmit to Landlord
a copy of any Community Right to Know report which is required to be
filed by Tenant with respect to the Leased Premises pursuant to Title
III of the Superfund Amendments and Reauthorization Act of 1986 or any
other Environmental Law; (iii) transmit to Landlord copies of any
demand letters, complaints or other documents initiating legal action,
citations, orders, notices or other material communications asserting
claims by private parties or Government Agencies with respect to
Hazardous Materials received by Tenant or its agents or
representatives (collectively, "Environmental Notice"), which
Environmental Notice requires a written response or any action to be
taken and/or if such Environmental Notice gives notice of and/or could
give rise to a material violation of any Environmental Law and/or
could give rise to any material cost, expense, loss or damage (an
"Environmental Obligation"); (iv) subject to Section 4.03(b), use
commercially reasonable efforts to comply with all Environmental Laws
relating to the use, maintenance and disposal of Hazardous Materials
and all orders or directives from any official, court or agency of
competent jurisdiction relating to the use or maintenance thereof or
requiring the removal, treatment, containment or other disposition
thereof; and (v) subject to Section 4.03(b), pay or otherwise dispose
of any fine, charge or imposition related thereto, unless Tenant shall
contest the same in good faith and by appropriate proceedings and the
right to use, and the value of, the Leased Premises are not adversely
affected thereby in any substantial manner.
Tenant shall submit to Landlord on an annual basis copies of
its approved Hazardous Materials communication plan, OSHA monitoring
plan, and permits required by the Resource Recovery and Conservation
Act of 1976, if Tenant is required to prepare, file or obtain any such
plans or permits.
If at any time Hazardous Materials are discovered in violation
of Environmental Laws on the Leased Premises, subject to Section
4.03(b), Tenant shall exercise commercially reasonable efforts to take
all actions and incur any and all expenses (which actions and expenses
shall be subject to Landlord's prior approval, not to be unreasonably
withheld, conditioned or delayed, except in Emergency Situations, in
which case Landlord's prior approval shall not be required) as may be
necessary or required by any Government Agency to: (i) clean up and
remove from and about the Leased Premises all Hazardous Materials
thereon; (ii) contain and prevent any further release or threat of
release of Hazardous Materials on or about the Leased Premises; and
(iii) use good faith efforts to eliminate any further release or threat
of release of Hazardous Materials on or about the Leased Premises.
(b) TENANT'S RESPONSIBILITY FOR DISPOSAL. It shall be Tenant's
responsibility to see that any Hazardous Material which is required to
be disposed of by Tenant pursuant to Environmental Law or this Section
4.03 is (i) temporarily stored on the Leased Premises in a manner
consistent with all Environmental Laws, and (ii) is removed and handled
by an
individual or firm licensed, in the case of Hazardous Material, to
dispose of such material. If Tenant fails to dispose of such Hazardous
Material as required by this Lease, Landlord may (but is not required
to) dispose of or contract for disposal and Tenant shall pay Landlord
for the cost thereof as Additional Rent hereunder. Nothing contained
herein shall be deemed to impose an obligation on Landlord to see that
Tenant properly disposes of Hazardous Material Waste stored or
generated on the Leased Premises. Landlord's approval of a firm or
individual selected by Tenant to remove such Hazardous Material shall
not be deemed to constitute acceptance by Landlord of the adequacy of
the services of such individual or firm nor shall Landlord be
responsible for such individual's or firm's performance of such
services.
(c) ENVIRONMENTAL INDEMNIFICATION. Tenant shall protect,
indemnify and hold harmless Landlord and all Facility Mortgagees, their
Affiliates and their respective members, shareholders or other equity
owners, directors, management committee, or similar persons, trustees,
officers and employees, and any of their respective successors or
assigns (hereafter the "Landlord Indemnitees" and when referred to
singly, a "Landlord Indemnitee") for, from and against any and all
debts, liens, claims, causes of action, administrative orders or
notices, costs, fines, penalties or expenses (including without
limitation, attorneys' fees and expenses) imposed upon, incurred by or
asserted against any Landlord Indemnitee resulting from, either
directly or indirectly, the presence in the Environment of the Leased
Premises or any properties surrounding the Leased Premises of any
Hazardous Materials arising during the Term, except to the extent that
the same arises by reason of the gross negligence or willful misconduct
of Landlord or any Landlord Indemnitee. Tenant's duty herein includes,
but is not limited to, indemnification for costs associated with
personal injury or property damage claims as a result of the presence
of Hazardous Materials in, upon or under the soil or ground water of
the Leased Premises in violation of any Environmental Law.
Upon demand, Tenant shall pay to Landlord, as Additional Rent,
any cost, expense, loss or damage (including without limitation,
attorneys' fees and costs) incurred by Landlord in asserting any right
under this Section 4.03(c), including, without limitation, any right of
indemnity under this Section 4.03(c) or otherwise arising from a
failure of Tenant to strictly observe and perform the foregoing
requirements.
(d) SURVIVAL. The provisions of this Section 4.03 shall
survive for a period of six (6) years from the date of expiration or
sooner termination of this Lease.
(e) LANDLORD'S RIGHTS. In addition to the rights heretofore
reserved by Landlord, at Landlord's option Landlord shall have the
right to restrain by injunction any violation or attempted violation by
the Tenant, or its assignees, or agents, of any of the restrictions or
covenants or agreements as to the use or occupation or the Leased
Premises as herein provided.
ARTICLE V
MAINTENANCE AND REPAIRS; SURRENDER; ALTERATIONS
SECTION 5.01. BUILDING SERVICES.
(a) HVAC. Landlord shall furnish central heating and air
conditioning ("HVAC") in season on business days during hours
designated by Landlord (the "Regular Building Hours") and at
temperatures and in amounts as are considered by Landlord, in
Landlord's sole discretion, to be Building Standard or in compliance
with governmental regulations. Any request for HVAC service at times
other than the Regular Building Hours may be furnished, at Landlord's
election, upon not less than twenty-four (24) hours' advance notice
from Tenant who shall bear the entire cost thereof at the rate
established by Landlord. In its sole discretion, Landlord may provide
additional services not enumerated herein. Failure by Landlord to any
extent to provide HVAC services or any other services not enumerated,
or any cessation thereof, shall not render Landlord liable in any
respect of damages to either person or property, be construed as an
eviction of Tenant, work an abatement of Rents or relieve Tenant from
fulfilling any covenant in this Lease. If any of the equipment or
machinery useful or necessary for provision of utility services or HVAC
services, and for which Landlord is responsible, breaks down, or for
any reason ceases to function properly, Landlord shall use reasonable
diligence to repair the same promptly, but Tenant shall have no claim
for rebate of Rents or for damages on account of any interruption in
service occasioned thereby. Landlord reserves the right from time to
time to make changes in the utilities and services provided by Landlord
to the Building. If Tenant requires any non-Building Standard HVAC
services, such as specialty air conditioning systems for special
equipment requiring special cooling or heating, Tenant shall be
responsible, subject to the prior written approval of Landlord, for the
entire cost of installation, maintenance, repair and operation of such
non-Building Standard service.
(b) JANITORIAL SERVICE. Landlord shall furnish Building
Standard janitorial services to the Leased Premises and public areas of
the Building five (5) times per week, excluding holidays. Landlord
shall not provide maid service to kitchens or storage areas included in
the Leased Premises. Tenant shall procure and pay the entire cost of
any non-Building Standard janitorial or maid services even though such
services may be provided in lieu of the Building services described
herein.
(c) ELEVATORS AND SERVICE AREAS. Landlord shall provide
passenger and freight elevator service for use in common with other
tenants for access to and from the Leased Premises. From time to time,
for any reason and without prior Notice to Tenant, Landlord permanently
or temporarily may limit the number of elevators available to Tenant or
designate a specific elevator for use by Tenant and Tenant's invitees.
The freight elevator, if any, shall be available only during the hours
specified by Landlord.
(d) WATER. Landlord shall furnish water to drinking fountains
and lavatories.
(e) SECURITY. Landlord shall have the right to provide a
uniformed security guard or guards to patrol the Complex and to
maintain and control access to and from the
Building and the Leased Premises. Landlord may install an access card
security system and may install, implement and maintain such other
security measures, procedures and systems from time to time as
Landlord, in its sole discretion, shall deem necessary or advisable.
Landlord shall not be responsible or liable to Tenant or any other
person for losses to Tenant's property or for personal injury caused
by criminal acts or entry by unauthorized persons into the Leased
Premises or the Building, including, without limitation, personal
property, equipment, money or jewelry lost or stolen from the Leased
Premises or the Common Tenant Shared Areas, regardless of whether such
loss occurs when those areas are locked against entry or not. At its
expense, and with the prior written approval of Landlord, which
Landlord shall not unreasonably withhold, Tenant may install, at
Tenant's sole cost and expense, such additional safety and security
systems or devices as Landlord shall have approved, provided that such
systems or devices do not interfere with Landlord's rights under this
Lease and provided that Landlord shall not be denied access to the
Leased Property thereby. At all times Tenant shall comply with
Landlord's security regulations for the Complex.
(f) CHARGE FOR SERVICES. All costs of Landlord for providing
the services set forth in this Section shall be subject to the
Additional Rent provisions of Section 3.01(b) and shall be payable as
provided therein.
SECTION 5.02. MAINTENANCE AND REPAIRS.
(a) LANDLORD REPAIR OBLIGATIONS. Except as expressly
provided in this Lease, Landlord shall not be required to build or
rebuild any improvement on the Leased Premises, or to make any
repairs, replacements, alterations, restorations, or renewals of any
nature or description to the Leased Premises, whether ordinary or
extraordinary, structural or nonstructural, foreseen or unforeseen,
or to make any expenditure whatsoever with respect thereto, or to
maintain the Leased Premises in any way during the Term hereof.
Landlord shall have the right to give, record and post, as
appropriate, notices of non-responsibility under any mechanic's lien
laws now or hereafter existing. Landlord shall maintain the exterior
of the Leased Premises (including the repair, maintenance and
replacement of the roof, gutters, leaders, downspouts, plumbing and
sewage lines, and electrical conduits and lines), shall maintain the
Common Tenant Shared Areas (including making all repairs and
replacements to the sidewalks, curbs and parking areas of the
Complex), and shall maintain the structural soundness of the
exterior walls, doors, corridors, windows and other structures and
equipment serving the Leased Premises (including the HVAC system).
Landlord shall not be liable to Tenant for any damage or
inconvenience and Tenant shall not be entitled to any damages nor to
any abatement or reduction of Rent by reason of any repairs,
alterations or additions made by Landlord hereunder. All requests
for repairs or maintenance that are the responsibility of Landlord
pursuant to any provision hereof must be made in writing to Landlord
at the address given in Section 18.08.
(b) TENANT'S OBLIGATIONS. Tenant, at its sole cost and
expense, during the Term hereof, shall maintain the Leased Premises and
make repairs thereto and replacements thereof so that the Leased
Premises shall be in as good repair and operating
condition as when delivered by Landlord to Tenant on the Commencement
Date, whether said repairs or replacements be usual or unusual,
foreseen or unforeseen, ordinary or extraordinary, structural and
non-structural (whether or not the need for such repairs occurs as a
result of Tenant's use, any prior use, the elements or the age of the
Leased Premises or Tenant's Personal Property, or any portion
thereof), and shall: (i) keep and maintain in good order, condition,
replacement and repair the Leased Premises and each and every interior
part thereof; and (ii) keep the alterations and improvements made by
Tenant in good repair, including structural repairs. Tenant shall not
take or omit to take any action, the taking or omission of which
materially impairs or degrades the value or the usefulness of the
Leased Premises or any part thereof for its Primary Intended Use.
Tenant's obligations under this Section 5.02 shall be limited, in the
event of any Casualty or Condemnation involving the Leased Premises,
as set forth in Articles IX and X. Tenant shall have the non-exclusive
right to prosecute claims against Landlord's predecessors-in-interest
(other than any Affiliates of Landlord), contractors, subcontractors
and suppliers for breach of any representation or warranty or for any
latent defects in the Leased Premises, unless Landlord is already
diligently pursuing such claims.
Notwithstanding any provision contained herein, Tenant shall
not be obligated to improve the Leased Premises beyond the condition as
delivered to Tenant by Landlord at the Commencement Date.
(c) COMPLIANCE WITH ALL LEGAL REQUIREMENTS. Tenant further
covenants and agrees that it will comply with all Legal Requirements of
every kind and nature relating to the Leased Premises now or hereafter
in effect, of the federal, state, municipal or other Government
Agencies and Board of Fire Insurance Underwriters having jurisdiction,
whether they be usual or unusual, ordinary or extraordinary, or whether
they or any of them relate to structural changes or requirements of
whatever nature, or to changes or requirements incident to and as a
result of any use and occupation thereof or otherwise, and Tenant will
pay all costs and expenses incidental to such compliance and will
indemnify and save harmless Landlord from all expense and/or damages by
reason of any notices, orders, violations or penalties filed against or
imposed upon the Leased Premises, or against Landlord because of the
failure of Tenant to comply with this covenant.
SECTION 5.03. TENANT'S PERSONAL PROPERTY. At its expense, Tenant may
(and, as provided hereinbelow, shall) place on the Leased Premises any items of
Tenant's Personal Property, and, subject to the conditions set forth below,
Tenant may remove and replace the same at any time in the ordinary course of
business. Tenant shall provide and maintain throughout the Term all such
Tenant's Personal Property as shall be necessary in order to operate the Leased
Premises in compliance in all material respects with applicable Legal
Requirements and Insurance Requirements and otherwise in accordance with
customary practice in the industry for such Primary Intended Use.
SECTION 5.04. SURRENDER.
(a) CONDITION OF LEASED PREMISES UPON SURRENDER. Upon the
expiration or sooner termination of this Lease, Tenant shall vacate and
surrender the Leased Premises
(and as to any permitted additions to the Leased Premises transfer the
permitted additions by deed or xxxx of sale) to Landlord in the
condition in which the Leased Premises was on the Commencement Date,
except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this Lease, ordinary wear
and tear and damage by Casualty or Condemnation excepted. Together
therewith Tenant shall surrender to Landlord any and all records and
documents related to the Leased Premises (but not, subject to Section
5.04(b) hereof, documents primarily related to Tenant's business
operated therein except as provided in Section 5.04(b) herein).
(b) TRANSITION PROCEDURES. Tenant shall cooperate in good
faith to provide access and information to any prospective purchaser or
tenant of the Leased Premises that may acquire the Leased Premises or
lease it upon the expiration or earlier termination of the Term. Upon
any expiration or earlier termination of the Term, Landlord and Tenant
shall cooperate in good faith to effect an orderly transition of the
Leased Premises. Upon any expiration or earlier termination of the
Term, Tenant promptly shall deliver or make available for inspection
and copying to Landlord or Landlord's designee, to the extent that
Landlord has not already received copies thereof, copies of all books
and records (including computer records) for the Leased Premises kept
by (or available to) Tenant.
(c) LANDLORD'S CONSENT. No surrender to Landlord of this
Lease or of the Leased Premises, or any part thereof, or of any
interest therein, shall be valid or effective unless agreed to and
accepted in writing by Landlord, and no act or omission by Landlord
or any representative or agent of Landlord, other than such a
written acceptance by Landlord, shall constitute an acceptance of
any such surrender.
SECTION 5.05. ALTERATIONS.
(a) TENANT CHANGES. Subject to the limitations set forth
herein, Tenant, at its sole cost and expense, shall have the right at
any time and from time to time during the Term of this Lease to make
changes and alterations to the Leased Premises (individually a "Tenant
Change" and collectively, "Tenant Changes"), subject, however, in all
cases, to the following:
(i) Landlord's prior written consent shall be
required in each instance of any Tenant's Change involving the
structure or exterior of any building (which consent shall not
be unreasonably withheld; it shall not be unreasonable for
Landlord to withhold such consent if the same shall be in
violation of any Facility Mortgage or if any Facility
Mortgagee shall not give its consent to the same where its
consent is required by the terms of such mortgage).
(ii) In addition to the consent required under
Section 5.05(a)(i) above, any Tenant Change, whether or not
structural or exterior, involving an estimated cost of more
than $50,000.00 shall require the prior written consent of
Landlord and, if applicable, any Facility Mortgagee.
(iii) No Tenant Change shall be undertaken until the
Tenant shall have
procured and paid for all required permits and authorizations
of all municipal departments and governmental subdivisions
having jurisdiction; and, at Tenant's expense, Landlord shall
join in application for such permits and authorizations
whenever such action is necessary.
(iv) No Tenant Change shall violate any Legal
Requirement or Insurance Requirement applicable to the Leased
Premises.
(v) Any Tenant Change involving an estimated cost of
more than $50,000.00 shall be conducted under the supervision
of a licensed architect or engineer selected by Tenant and
shall be made in accordance with detailed plans and
specifications (the "Plans and Specifications") and cost
estimates prepared by such architect or engineer and approved
in writing by the Landlord, which approval Landlord agrees not
to unreasonably withhold.
(vi) Any Tenant Change shall be made promptly and in
good workmanlike manner and in compliance with all applicable
permits, authorizations, building and zoning laws, and all
laws, statutes, ordinances, rules and regulations of all
Government Agencies having jurisdiction and in accordance with
the orders, rules and regulations of the Board of Fire
Insurance Underwriters and any other body hereafter exercising
similar functions having or asserting jurisdiction over the
Leased Premises.
(vii) The cost of any Tenant Change shall be paid in
cash or its equivalent by the Tenant, so that the Leased
Premises shall at all times be free of liens for labor or
materials supplied or claimed to have been supplied to the
Leased Premises.
(viii) Any such Tenant Change shall immediately be
and become the property of the Landlord.
(ix) Tenant shall carry all necessary worker's
compensation insurance and shall furnish Landlord with
evidence of any and all such coverage.
(x) No Tenant Change shall tie-in or connect the
Leased Premises with any property outside the Leased Premises
without the prior written consent of the Landlord.
(xi) No Tenant Change shall reduce the value of the
Leased Premises or impair the structural integrity of any
building comprising a part of the Leased Premises, it being
understood and agreed that the fair market value of the Leased
Premises including such Tenant Change shall be at least equal
to or greater than the fair market value of the Leased
Premises prior to such Tenant Change.
(b) RESTRICTIONS. Notwithstanding anything to the contrary
contained in this Lease, Tenant shall not, without Landlord's prior
written approval, make any alteration or change to the Leased Premises
which would decrease the size or decrease the square foot
floor area of any building comprising a part of the Leased Premises.
(c) COST OF TENANT CHANGES. It is understood and agreed by
and between Landlord and Tenant that the cost of all such Tenant
Changes shall be paid solely by Tenant. Under no circumstances shall
the cost of any such Tenant Change be deducted from the Minimum Rent or
Additional Rent due hereunder.
ARTICLE VI
LIENS
SECTION 6.01. COVENANT AGAINST LIENS. Tenant agrees that it will not
create, permit or suffer the imposition of any Lien on the Leased Premises or
any part thereof or any interest therein other than: (a) Permitted Liens; (b)
liens for Real Estate Taxes not yet due and payable; (c) subleases permitted by
Article XIII; (d) liens for Impositions or for sums arising from the application
of Legal Requirements so long as the same (i) are not yet delinquent, or (ii)
are being contested in accordance with Article VII; (e) liens of mechanics,
laborers, materialmen, suppliers or vendors incurred in the ordinary course of
business that are not yet delinquent or are for sums that are being contested in
accordance with Article VII; and (f) any Facility Mortgage or other liens which
are permitted pursuant to the provisions of Article XVII. If, because of any act
or omission (or alleged act or omission) of Tenant, any Lien, at any time shall
be filed against the Leased Premises, or any improvements thereon, or against
Landlord or any interest in the Leased Premises (whether or not such Lien is
valid or enforceable as such), by reason of, or arising out of any labor or
materials furnished or alleged to have been furnished or to be furnished to or
for Tenant at the Leased Premises by reason of any construction, alterations, or
repair of all or any part thereof, or for any other reason whatsoever, Tenant
promptly, at its own cost and expense, shall cause same to be canceled and
discharged of record by bond or otherwise within ten (10) days after notice to
Tenant of the filing thereof and Tenant shall defend on behalf of Landlord, but
at Tenant's sole cost and expense, any action, suit or proceeding which may be
brought thereon or for the enforcement of such Lien, or in the event Landlord
elects to defend any such action, suit, or proceeding, by counsel or legal
representatives of its own selection, Tenant shall pay all costs thereof,
including, but not limited to, attorneys' fees. Tenant shall pay and shall
indemnify and save harmless Landlord against and from all costs, damages,
liabilities, suits, penalties, claims and demands, including reasonable counsel
fees resulting therefrom and from any action, suit or proceeding which may be
brought thereon or for the enforcement of such lien, charge, order, judgment or
encumbrance. Tenant further agrees to pay any damages and to discharge any
judgments entered therein and to save Landlord harmless from any claims or
damages resulting therefrom. If Tenant fails to comply with the foregoing
provisions, Landlord shall have the option of discharging or bonding any such
Lien and Tenant agrees to reimburse Landlord for all costs, expenses and other
sums of money in connection therewith (as Additional Rent) with interest at the
maximum rate allowed by law promptly upon demand. All materialmen, contractors,
artisans, mechanics, laborers and any other persons now or hereafter contracting
with Tenant for the furnishing of any labor, services, materials, supplies or
equipment with respect to any portion of the Leased Premises, at any time from
the date hereof until the end of the Lease Term, are hereby charged with notice
that they must look exclusively to Tenant, and not to Landlord, to obtain
payment for same.
ARTICLE VII
PERMITTED CONTESTS
SECTION 7.01. PERMITTED CONTESTS. Tenant shall have the right to
contest the amount or validity of any Imposition, Legal Requirement, Insurance
Requirement, Environmental Obligation, lien, attachment, levy, encumbrance,
charge or claim (collectively, "Claims") as to the Leased Premises, by
appropriate legal proceedings, conducted in good faith and with due diligence;
PROVIDED, HOWEVER, that: (a) the foregoing shall in no way be construed as
relieving, modifying or extending any obligation of Tenant provided for in this
Lease to pay any Claims as finally determined; (b) such contest, or the
maintenance of any Lien during such contest, shall not cause Landlord or Tenant
to be in default under any Facility Mortgage or other agreement encumbering the
Leased Premises or any interest therein or result in a Lien attaching to the
Leased Premises unless Tenant shall within ten (10) days thereafter, have such
Lien released of record or deliver to Landlord a bond or other security
reasonably satisfactory to Landlord, which shall be in form, amount, and issued
by a surety reasonably satisfactory to Landlord, indemnifying Landlord against
all costs and liabilities resulting from such Lien and the foreclosure or
attempted foreclosure thereof; (c) no part of the Leased Premises nor any Rent
therefrom shall be in any immediate danger of sale, forfeiture, attachment or
loss; and (d) Tenant shall indemnify and hold harmless Landlord from and against
any cost, claim, damage, penalty or reasonable expense, including reasonable
attorneys' fees, incurred by Landlord in connection therewith or as a result
thereof. Provided that there is no Default or Event of Default hereunder, Tenant
shall be entitled to any refund of any Claims and such charges and penalties or
interest thereon which have been paid by Tenant or paid by Landlord and for
which Landlord has been fully reimbursed by Tenant. If Tenant shall fail (i) to
pay any Claims when finally determined, (ii) to provide reasonable security
therefor, or (iii) to prosecute any such contest diligently and in good faith,
Landlord may, upon reasonable notice to Tenant (which notice may be oral and
shall not be required if Landlord shall reasonably determine that the same is
not practicable), pay such charges, together with interest and penalties due
with respect thereto, and Tenant shall reimburse Landlord therefor, upon demand,
as Additional Rent. Landlord agrees to join in any such proceedings if required
legally to prosecute such contest; PROVIDED, HOWEVER, that Landlord shall not
thereby be subjected to any liability or cost therefor (including, without
limitation, for the payment of any costs or expenses in connection therewith).
ARTICLE VIII
INSURANCE AND INDEMNIFICATION
SECTION 8.01. LANDLORD'S INSURANCE. At all times during the Term,
Landlord shall insure the Building against all risk of direct physical loss in
an amount and with such deductibles as Landlord considers appropriate; PROVIDED
that such insurance must be in an amount equal to at least the Replacement Cost
of the Building; PROVIDED FURTHER that Landlord shall not be obligated in any
way or manner to insure any of Tenant's Personal Property upon or within the
Leased Premises, any fixtures installed or paid for by Tenant upon or within the
Leased Premises or any
improvements which Tenant may construct on the Leased Premises. Tenant
acknowledges that, except as otherwise expressly set forth in this Lease, it has
no right to receive any proceeds from any such insurance policies carried by
Landlord, and that such insurance will be for the sole benefit of Landlord, with
no coverage for Tenant for any risk insured against.
SECTION 8.02. TENANT'S GENERAL INSURANCE REQUIREMENTS. At all times
during the Term and at any other time Tenant shall be in possession of the
Leased Premises, the Leased Premises shall be insured against the risks and in
the amounts described below. This insurance shall be written by companies
authorized to issue insurance in the State of Colorado. The policies must name
Tenant as the insured and Landlord and any Facility Mortgagee as additional
named insureds and/or as loss payees. Losses shall be payable to Landlord or
Tenant as provided in Article IX of this Lease. Any loss adjustment for
coverages insuring both parties shall require the written consent of Landlord
and Tenant, each acting reasonably and in good faith. The policies on the Leased
Premises (including the Leased Premises and Fixtures owned by Landlord), and on
Tenant's Personal Property, shall, subject to Section 8.02(f), be primary,
non-contributory, satisfy the requirements of any ground lease, mortgage,
security agreement or other financing then affecting the Leased Premises, and at
a minimum shall include:
(a) "All Risk" property insurance, including insurance against
loss or damage by fire, vandalism and malicious mischief, and all
physical loss perils insurance for the full insurable value of Tenant's
Personal Property upon or within the Leased Premises, any fixtures
installed or paid for by Tenant upon or within the Leased Premises or
any improvements which Tenant may construct on the Leased Premises;
(b) loss of rent insurance (on the "Special Form") in the
minimum amount of one (1) year of Minimum Rent and Additional Rent
(based on the last twelve (12) months in which the Leased Premises were
operated for their Primary Intended Use) for the benefit of Landlord,
and business interruption insurance on the "Special Form" in the amount
of one (1) year of projected net profit of Tenant from the Leased
Premises (exclusive of collection costs and any operating expenses that
are considered by the applicable insurance company to be non-continuing
as a result of any Casualty), for the benefit of Tenant;
(c) comprehensive general liability insurance, including
bodily injury and property damage (including broad form contractual
liability, fire legal liability and completed operations coverage)
having policy limits as to claims with respect to the Leased Premises
of at least ONE MILLION DOLLARS ($1,000,000) per occurrence, TWO
MILLION DOLLARS ($2,000,000) aggregate per location; PROVIDED, HOWEVER,
that such limits shall be modified to conform to any required
underlying statutory coverage, and umbrella coverage shall be provided
having limits of TWENTY MILLION DOLLARS ($20,000,000) per occurrence
and in the aggregate, and attaching in excess of policy limits as to
general liability, where applicable, and employer's liability coverage,
covering each of the following: bodily injury, death, or property
damage liability per occurrence, personal injury, general aggregate,
products and completed operations, and "all risk legal liability"
(including liquor law or "dram shop" liability, if liquor or alcoholic
beverages are served
on the Leased Premises) with respect to Landlord and Tenant;
(d) insurance coverage for claims by employees of Tenant for
wrongful termination, discrimination or sexual harassment;
(e) worker's compensation insurance coverage for all persons
employed by Tenant directly, as borrowed employees, or as statutory
employees, with statutory limits and otherwise with limits of and
provisions in accordance with Legal Requirements, and employer's
liability insurance having a limit of $500,000; and
(f) such additional insurance and endorsements (and/or
increased amounts of insurance hereinabove required) as may be
reasonably required, from time to time, by Landlord, any Facility
Mortgagee or any rating agency, or any existing or future ground
lessor.
SECTION 8.03. RESPONSIBILITY FOR TENANT'S INSURANCE. Tenant shall
obtain or cause to be obtained the insurance and pay the premiums for the
coverages described in Section 8.02. Tenant also shall be responsible for any
and all deductibles and self-insured retentions in connection with such
coverages.
SECTION 8.04. WAIVER OF SUBROGATION. Landlord and Tenant agree that
(insofar as and to the extent that such agreement may be effective without
invalidating or making it impossible to secure insurance coverage from
responsible insurance companies doing business in Colorado) with respect to any
loss covered by insurance then being carried by Landlord or Tenant,
respectively, the party carrying such insurance and suffering said loss releases
the other of and from any and all claims with respect to such loss; and they
further agree that their respective insurance companies shall have no right of
subrogation against the other on account thereof, even though extra premium may
result therefrom.
SECTION 8.05. SATISFACTORY FORMS All insurance policies and
endorsements required of Tenant pursuant to this Article VIII shall be fully
paid for, nonassessable and, except for umbrella coverage, shall contain such
provisions and expiration dates and be in such form and amounts and issued by
insurance carriers authorized to do business in Colorado, having a general
policy holder's rating of "A/VI" in Best's latest rating guide (or such other
higher rating or such other customarily used rating agency as may be required by
any Facility Mortgagee), and otherwise satisfactory to Landlord. Without
limiting the foregoing, such policies shall include only deductibles reasonably
approved by Landlord. Tenant shall deliver policies or certificates thereof to
Landlord and any Facility Mortgagee prior to their effective date (and, with
respect to any renewal policy, thirty (30) days prior to the expiration of the
existing policy), and, in the event Tenant shall fail to effect such insurance
as herein required, to pay the premiums therefor or to deliver such policies or
certificates to Landlord or any Facility Mortgagee at the times required,
Landlord shall have the right, but not the obligation, after ten (10) days'
written notice to Tenant, to acquire such insurance and pay the premiums
therefor, which amounts shall be paid by Tenant as Additional Rent. All such
policies shall provide Landlord and any Facility Mortgagee thirty (30) days'
prior written notice of any material modification, expiration or cancellation of
such policy.
SECTION 8.06. BLANKET POLICY. Notwithstanding anything to the contrary
contained in this Article VIII, Tenant's obligations to maintain the insurance
herein required may be brought within the coverage of a so-called blanket policy
or policies of insurance, provided that, except as otherwise approved by
Landlord in writing, (a) the coverage thereby afforded will not be reduced or
diminished from that which would exist under a separate policy meeting all other
requirements of this Lease, and (b) the requirements of this Article VIII are
otherwise satisfied.
SECTION 8.07. GENERAL INDEMNIFICATION OF LANDLORD BY TENANT.
(a) NON-LIABILITY. Landlord shall not be responsible or liable
to Tenant or any of its employees, guests, licensees or invitees, and
Tenant, for itself, its employees, guests, licensees or invitees,
hereby waives all claims against Landlord, for any loss, injury or
damage to any person or property in or about the Leased Premises on any
space adjacent to or adjoining the Leased Premises, or any part thereof
by and from any cause whatsoever, including, without limiting the
generality of the foregoing, the following: (a) those caused by snow,
ice or water leakage of any character from the roof, walls, pipes,
basement or other portion of the Leased Premises; (b) those caused by
steam, gas, fire, oil, electricity or any cause whatsoever in, on or
about the Leased Premises; or (c) those caused by the acts of Tenant,
occupants, invitees, licensees and/or guests of the Leased Premises.
(b) INDEMNIFICATION. Except as otherwise provided in Sections
4.03(c) (Environmental Indemnification), 5.01(b) (Legal Requirement
Compliance), 6.01 (Liens) and 7.01 (Permitted Contest), Tenant shall
protect, indemnify and hold harmless Landlord and each Landlord
Indemnitee from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and reasonable expenses
(including, without limitation, reasonable attorneys' fees), to the
maximum extent permitted by law, and notwithstanding the existence of
any insurance provided for herein, but subject to Section 8.04 hereof,
and without regard to the policy limits of any such insurance, imposed
upon or incurred by or asserted against Landlord or any Landlord
Indemnitee by reason of:
(i) any breach, violation or non-performance by
Tenant or any Person claiming under Tenant or the agents,
employees, patients, guests, invitees or licensees of Tenant
or of any such person of any term, obligation or promise under
this Lease or any law, ordinance or governmental requirement
of any kind arising prior to and during the Term;
(ii) the use or occupancy or manner of use or
occupancy of the Leased Premises by Tenant or any Person
claiming under Tenant, or their respective agents;
(iii) any activity, work or thing done, permitted or
suffered by Tenant or any Person claiming under Tenant, or
their respective agents, in or about the Leased Premises;
(iv) liabilities under any leases, contracts,
concession agreements or other agreements entered into by
Tenant or any Person claiming under Tenant, or their
respective agents, with respect to the Leased Premises;
(v) the negligence or willful misconduct of Tenant
or any Person claiming under Tenant, or their respective
agents prior to and during the Term, including any such
negligence or willful misconduct giving rise to any employee
claims by employees of Tenant or such Persons for wrongful
termination, discrimination or sexual harassment;
(vi) any accident, injury to or death of persons or
loss of or damage to property occurring on or about the Leased
Premises or adjoining sidewalks, steps, railings and
approaches appurtenant thereto or rights of way by any Person
whatsoever prior to and during the Term, including, without
limitation, any claims under liquor liability, "dram shop" or
similar laws;
(vii) any litigation, proceeding (other than
Condemnation proceedings) or claim by Government Agencies or
other third parties to which Landlord or any Landlord
Indemnitee is made a party or participant or which is
otherwise asserted against Landlord or any Landlord
Indemnitee, relating to the Leased Premises or Tenant's
Personal Property, the business conducted in or on the Leased
Premises, or any use, misuse, non-use, condition, management,
maintenance, or repair thereof, the occurrence giving rise to
which litigation, proceeding or claim occurs prior to and
during the Term;
(viii) any Impositions, Real Estate Taxes, Utility
Charges, Insurance Requirements and other Additional Rent that
are the obligations of Tenant pursuant to the applicable
provisions of this Lease; and
(ix) any act or omission of Tenant, or any
concessionaire or assignee or its licensees, invitees, guests,
patients, servants, agents, employees or contractors prior to
and during the Term.
Tenant shall pay all amounts payable under this Section 8.07 within
seven (7) Business Days after demand therefor and, if not timely paid, such
amounts shall bear interest at eighteen percent (18%) per annum from the date of
determination to the date of payment. Tenant, at its expense, shall contest,
resist and defend any such claim, action or proceeding asserted or instituted
against Landlord and/or any Landlord Indemnitee or may compromise or otherwise
dispose of the same, with Landlord's and/or Landlord Indemnitee's prior written
consent. The obligations of Tenant under this Section 8.07 are in addition to
the obligations set forth in Sections 4.03(c), 5.01(b), 6.01 and 7.01, and shall
survive for a period of six (6) years from the date of termination or expiration
of this Lease.
SECTION 8.08. INDEPENDENT CONTRACTORS. Except as otherwise approved by
Landlord
in writing, Tenant shall cause any person or company entering upon the Leased
Premises to provide any installation, construction or repair (each a
"Contractor"), (a) to have in full force and effect Contractor's Liability
Coverage (hereafter defined) effective throughout the period said Contractor is
upon the Leased Premises and for one year thereafter, and (b) to deliver within
five (5) Business Days of Landlord's request a certificate ("Contractor's
Insurance Certificate") evidencing compliance with this Section 8.08 prior to
the Contractor's first entry upon the Leased Premises. As used herein, the term
"Contractor's Liability Coverage" means a comprehensive general liability
insurance policy meeting the requirements of this Article VIII (as if required
to be provided by Tenant) except the minimum policy limit shall be $1,000,000
per occurrence and $3,000,000 in the aggregate. Within thirty (30) days after
delivery of Landlord's written request, Tenant shall deliver copies of all
Contractor's Insurance Certificates to Landlord. Additionally, Tenant shall
require any Contractor who is also an employer as defined by the Workers'
Compensation Act of Colorado (C.R.S. 8-40-101, ET SEQ.) to have workers'
compensation insurance for such entity and the entity's employees with limits
and provisions in accordance with Legal Requirements.
ARTICLE IX
CASUALTY
SECTION 9.01. RECONSTRUCTION IN THE EVENT OF CASUALTY.
(a) LEASED PREMISES RENDERED UNSUITABLE FOR PRIMARY INTENDED
USE. If during the Term, the Leased Premises are totally or partially
destroyed by any loss, damage or destruction to the Leased Premises, or
any portion thereof (a "Casualty") and the Leased Premises are thereby
rendered Unsuitable for their Primary Intended Use for a period of
thirty (30) or more days, as reasonably determined by Landlord, and
insurance proceeds are available for restoration or repair, Landlord
shall give Tenant written Notice of its election of one of the
following options:
(i) This Lease shall terminate as of the date of the
Casualty and neither Landlord nor Tenant shall have any
further liability hereunder except for any liabilities which
have arisen or occurred prior to such termination, and those
which expressly survive termination of this Lease, and
Landlord shall be entitled to retain all Casualty insurance
proceeds (except for any amount thereof paid with respect to
Tenant's Personal Property); or
(ii) Landlord promptly shall restore the Leased
Premises, utilizing the insurance proceeds, and this Lease
shall not terminate.
For purposes of this Section 9.01(a), the term "Casualty"
shall be deemed to include a final unappealable determination by
applicable federal or Colorado authorities of the revocation or
limitation of any material License, permit, certification, or approval
required for the material lawful operation of the Leased Premises in
accordance with its Primary Intended Use or the loss or limitation of
any material License, permit, certification, or approval under any
other circumstances under which Tenant is required to
cease its operation of the Leased Premises in accordance with their
Primary Intended Use at the time of such loss or limitation, which
revocation, limitation or loss is not caused by actions of Tenant, its
agents, employees, patients, guests, invitees and/or licensees, or
which is not beyond the reasonable control of Tenant.
(b) LEASED PREMISES NOT RENDERED UNSUITABLE FOR PRIMARY
INTENDED USE. If during the Term, the Leased Premises are partially
destroyed by a Casualty, but the Leased Premises are not thereby
rendered Unsuitable for Primary Intended Use for a period of thirty
(30) or more days, as reasonably determined by Landlord, Landlord shall
proceed, to the extent of insurance proceeds actually received by
Landlord after the exercise by any Facility Mortgagee of an option (if
any) to apply proceeds against Landlord's debt to such Facility
Mortgagee, with reasonable diligence to rebuild or repair the Building
or other improvements to substantially the same condition in which they
existed prior to the Casualty.
SECTION 9.02. TENANT'S PROPERTY INSURANCE. All insurance proceeds
payable by reason of any loss of or damage to any of Tenant's Personal Property
shall be paid to Tenant.
SECTION 9.03. ABATEMENT OF RENT. Any damage or destruction due to
Casualty notwithstanding, this Lease shall remain in full force and effect
(except as otherwise expressly provided in this Article IX) and Tenant's
obligation to pay Rents required by this Lease shall remain unabated by any
Casualty which: (a) is caused by the negligence or misconduct of Tenant, its
agents, employees, patients, guests, invitees or licensees; (b) does not result
in a reduction of Gross Revenues; or (c) does not result in the payment of loss
of rent insurance proceeds to Landlord pursuant to Section 8.02(b) above. If the
Leased Premises are to be rebuilt or repaired and are rendered Unsuitable for
Primary Intended Use in whole or in part following a Casualty (excluding those
described in the preceding sentence), the Minimum Rent payable under this Lease
during the period for which the Leased Premises are Unsuitable for Primary
Intended Use shall be reduced to an amount determined by multiplying the Minimum
Rent that would otherwise be payable but for this provision by the ratio that
the Rentable Area of the portion of the Leased Premises not rendered Unsuitable
for Primary Intended Use bears to the total rental Area of the Leased Premises
prior to the Casualty. Landlord's obligation to rebuild or restore shall be
limited to restoring the Leased Premises to substantially the condition in which
the same existed prior to the Casualty, exclusive of improvements which Tenant
may construct on the Leased Premises.
ARTICLE X
CONDEMNATION
SECTION 10.01. TOTAL CONDEMNATION, ETC. If either (a) the whole of the
Leased Premises shall be taken by Condemnation or (b) a Condemnation of less
than the whole of the Leased Premises renders the Leased Premises Unsuitable for
Primary Intended Use, as reasonably determined by Landlord, Landlord shall give
Tenant Notice that the Leased Premises will be Unsuitable for Primary Intended
Use and this Lease shall terminate as of the day of the Condemnation and neither
Landlord nor Tenant shall have any further liability hereunder except for any
liabilities which have arisen or occurred prior to such termination, and those
which
expressly survive termination of this Lease, and Tenant and Landlord shall seek
the Award for their respective interests in the Leased Premises as provided in
Section 10.04.
SECTION 10.02. PARTIAL CONDEMNATION. In the event of a Condemnation
of less than the whole of the Leased Premises such that the Leased Premises
is still suitable for its Primary Intended Use, as reasonably determined by
Landlord, to the extent that the Award is sufficient therefor, Landlord shall
proceed with reasonable diligence to restore the untaken portion of the
Leased Premises so that the Leased Premises shall constitute a complete
architectural unit of the same general character and condition (as nearly as
may be possible under the circumstances) as the Leased Premises existing
immediately prior to such Condemnation, in full compliance with all Legal
Requirements. Landlord may, at its option, condition its restoration on the
absence of any continuing Event of Default and the approval by all Government
Agencies and other regulatory bodies whose approval is required. Landlord's
obligation under this Section 10.02 to restore the Leased Premises shall be
subject to (i) the collection of the Award by Landlord and (ii) the
satisfaction of any applicable requirements of any Facility Mortgage, and the
release of such Award by any Facility Mortgagee. If Landlord has not received
the Award, or the Award is insufficient to restore the untaken portion of the
Leased Premises as provided above, then Landlord, in its sole discretion,
shall have the right to terminate this Lease and neither Landlord nor Tenant
shall have any further liability hereunder, except for any liabilities which
have arisen or occurred prior to such termination and those which expressly
survive termination of this Lease, and Landlord shall be entitled to retain
the entire Award; provided that Tenant shall be permitted to seek a separate
award for the value of Tenant's Personal Property that was taken in such
Condemnation.
SECTION 10.03. ABATEMENT OF RENT. In the event of a partial
Condemnation as described in Section 10.02 which does not result in a
termination of this Lease by Landlord, the Minimum Rent payable under this
Lease as of the day of the Condemnation shall be reduced to an amount
determined by multiplying the Minimum Rent that would otherwise be payable
but for this provision by the ratio that the Rentable Area of the portion of
the Leased Premises not taken by Condemnation bears to the total rental Area
of the Leased Premises prior to the Condemnation.
SECTION 10.04. ALLOCATION OF AWARD. The total Award shall be solely
the property of and payable to Landlord; PROVIDED, HOWEVER, that any portion
of the Award made for the taking of Tenant's leasehold interest in the Leased
Premises (valued without regard to any right of termination in Landlord that
otherwise exists under this Article X), loss of business during the remainder
of the Term (determined without regard to any provision for termination that
might otherwise arise under this Article X), the taking of Tenant's Personal
Property or Tenant's removal and relocation expenses shall be the sole
property of and payable to Tenant (subject to the provisions of Section
10.02). Subject to the rights of any Facility Mortgagee under any Facility
Mortgage, in any Condemnation proceedings, Landlord and Tenant shall each
seek its own Award in conformity herewith, at its own expense.
ARTICLE XI
TENANT DEFAULTS; REMEDIES
SECTION 11.01. DEFAULT. The occurrence of any one or more of the
following events shall constitute an "Event of Default" hereunder:
(a) Tenant fails (i) to make any payment of the Minimum Rent
payable hereunder when due, or (ii) subject to the right to contest
same pursuant to Article VII hereof, to make any required payments of
Additional Rent within three (3) Business Days after receipt of Notice
thereof from Landlord.
(b) Tenant fails to maintain the insurance coverages that it
is required to maintain under Article VIII.
(c) Except as otherwise expressly provided herein, Tenant
defaults in the due observance or performance of any of the terms,
covenants or agreements contained herein to be performed or observed by
it (other than as specified in clauses (a) and (b) above), and, in
either case, such default continues for a period of thirty (30) days
after Notice thereof from Landlord to Tenant; PROVIDED, HOWEVER, that
if such default is curable but such cure cannot be accomplished with
due diligence within such period of time and if, in addition, Tenant
commences to cure such default within thirty (30) days after Notice
thereof from Landlord and thereafter prosecutes the curing of such
default with all due diligence, such period of time shall be extended
to such period of time (not to exceed one hundred twenty (120) days in
the aggregate, subject to Unavoidable Delay) as may be necessary to
cure such default.
(d) A default or breach of any other agreements between
Tenant and/or its Affiliates on the one hand, and Landlord and/or
its Affiliates on the other hand, and there is no cure of the same
within the applicable grace or cure period.
(e) Tenant generally is not paying its debts as they become
due, or Tenant makes a general assignment for the benefit of creditors.
(f) Any petition is filed by or against Tenant under the
federal bankruptcy laws, or any other proceeding is instituted by or
against Tenant seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for Tenant or for any substantial
part of the property of Tenant, and, in the case of any involuntary
petition filed or proceeding instituted against Tenant only, such
proceeding is not dismissed within sixty (60) days after institution
thereof, or Tenant takes any action to authorize or effect any of the
actions set forth above in this paragraph.
(g) Tenant causes or institutes any proceeding for its
dissolution or termination.
(h) Tenant ceases operation of the Center in the Leased
Premises for its Primary Intended Use for a period in excess of thirty
(30) consecutive days, except as a
result of a Casualty, other Emergency Situations, the matters set
forth in Section 18.15, or partial or complete Condemnation of the
Leased Premises or of the immediate surroundings so as to prohibit
reasonable access by customers of the Center, and does not commence
operation of the Leased Premises within ten (10) days after receipt of
Notice thereof from Landlord. [WANT?]
(i) The estate or interest of Tenant in the Leased
Premises or any part thereof is levied upon or attached in any
proceeding and the same is not vacated or discharged within the
later of (i) sixty (60) days after commencement thereof, unless the
amount in dispute is less than $10,000.00, in which case Tenant
shall give Notice to Landlord of the dispute but Tenant may defend
in any suitable way, and (ii) thirty (30) days after receipt by
Tenant of Notice thereof from Landlord (unless Tenant shall be
contesting such lien or attachment in good faith in accordance with
Article VII).
(j) If any representation or warranty of Tenant set forth
herein is false in any material respect, or if Tenant renders any false
statement or account.
In any such event, Landlord, in addition to all other remedies
available to it, may terminate this Lease by giving Notice thereof to Tenant,
and upon the expiration of the time, if any, fixed in such Notice, this Lease
shall terminate and all rights of Tenant under this Lease shall cease.
Notwithstanding any provision contained herein, Landlord shall have, and may
exercise in its sole and absolute discretion, all, or none of the, rights and
remedies available at law and in equity to Landlord as a result of Tenant's
breach of this Lease.
Upon the occurrence of an Event of Default, Landlord may, in
addition to any other remedies provided herein, enter upon the Leased
Premises and take possession thereof, and either (i) retain any and all of
Tenant's Personal Property on the Leased Premises, without liability for
trespass or conversion (Tenant hereby waiving any right to Notice or hearing
prior to such taking of possession by Landlord) or (ii) sell the same at
public or private sale, after giving Tenant reasonable Notice of the time and
place of any public or private sale, at which sale Landlord or its assigns
may purchase all or any portion of Tenant's Personal Property. Unless
otherwise provided by law and without intending to exclude any other manner
of giving Tenant reasonable notice, the requirement of reasonable Notice
shall be met if such Notice is given at least ten (10) Business Days before
the date of sale. The proceeds from any such disposition, less all expenses
incurred in connection with the taking of possession, holding and selling of
such property (including reasonable attorneys' fees) shall belong to
Landlord. Any surplus shall be paid to Tenant or as otherwise required by
law, and Tenant shall pay any deficiency to Landlord, as Additional Rent,
upon demand. [NEED TO EXCLUDE THE SIMULATOR?]
SECTION 11.02. REMEDIES. None of (a) the termination of this Lease
pursuant to Section 11.01, (b) the repossession of the Leased Premises, (c)
the failure of Landlord to re-let the Leased Premises, or (d) the re-letting
of the Leased Premises, shall relieve Tenant of its liability and obligations
hereunder, all of which shall survive any such termination, repossession or
re-letting. In the event of any such termination, Tenant shall forthwith pay
to Landlord all Rents due and payable with respect to the Leased Premises
through and including the date of such termination. Thereafter, Tenant, until
the earlier of what would have been the end of the Term of
this Lease in the absence of such termination, and whether or not the Leased
Premises or any portion thereof shall have been re-let, shall be liable to
Landlord for, and shall pay to Landlord, as current damages, the Rent and
other charges which would be payable hereunder for the remainder of the Term
had such termination not occurred, less the net proceeds, if any, of any
re-letting or other operation by or on behalf of Landlord of the Leased
Premises, after deducting all expenses in connection with such re-letting,
including, without limitation, all repossession costs, brokerage commissions,
legal expenses, attorneys' fees, advertising, expenses of employees,
alteration costs and expenses of preparation for such re-letting. Landlord
may bring action(s) or proceeding(s) for the recovery of any deficits
remaining unpaid, without being obliged to await the end of the Lease Term
for a final determination of Tenant's account, and the commencement or
maintenance of any one or more actions shall not bar Landlord from bringing
other or subsequent actions for further accruals of Minimum Rent, Additional
Rent or other charges or moneys due from Tenant to Landlord under this Lease
pursuant to the provisions of this Section. Tenant shall pay such current
damages to Landlord monthly on the days on which the Minimum Rent would have
been payable hereunder if this Lease had not been so terminated.
In case of any Event of Default, re-entry, expiration and
dispossession by summary proceedings or otherwise, Landlord may (a) re-let
the Leased Premises or any part or parts thereof, either in the name of
Landlord or otherwise, for a term or terms which may, at Landlord's option,
be equal to, less than or exceed the period which would otherwise have
constituted the balance of the Term and may grant concessions or free rent to
the extent that Landlord considers advisable and necessary to re-let the
same, and (b) make such reasonable alterations, repairs and decorations in
the Leased Premises or any portion thereof as Landlord, in its sole and
absolute discretion, considers advisable and necessary for the purpose of
re-letting the Leased Premises; and the making of such alterations, repairs
and decorations shall not operate or be construed to release Tenant from
liability hereunder as aforesaid. Landlord shall in no event be liable in any
way whatsoever for any failure to re-let all or any portion of the Leased
Premises, or, in the event that the Leased Premises is re-let, for failure to
collect the rent under such re-letting; PROVIDED, HOWEVER, that Landlord
covenants and agrees in the event of any termination of this Lease as a
result of an Event of Default, to use commercially reasonable efforts to
mitigate its damages. To the maximum extent permitted by law, Tenant hereby
expressly waives any and all rights of redemption granted under any present
or future laws in the event of Tenant being evicted or dispossessed, or in
the event of Landlord obtaining possession of the Leased Premises, by reason
of the occurrence and during the continuation of an Event of Default
hereunder.
Under any of the circumstances heretofore mentioned in which Landlord
shall have the right to hold Tenant liable under this Lease for the payment of
any of the Rents, or any balance then remaining, Landlord shall have the
election in lieu of holding Tenant so liable, forthwith to recover against
Tenant, as damages for loss of the bargain and not as a penalty, an aggregate
sum which, at the time of such termination of this Lease represents the then
present worth discounted at the prime rate of interest in effect as of said date
as said rate is set by Norwest Bank Colorado, N.A., or its successors or
assigns, of the excess, if any, of the aggregate of the Rents payable by Tenant
hereunder that would have accrued for the balance of the Term of the Lease over
the aggregate fair rent value of the Leased Premises for the balance of such
Term. Nothing herein contained, however, shall limit or prejudice the right of
Landlord, in any bankruptcy of insolvency
proceedings, to prove for, and obtain as, liquidated damages by reason of
such termination an amount equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings in
which, such damages are to be proved whether or not such amount be greater,
equal to, or less than the amount of the difference referred to above. Tenant
agrees to pay, in addition to the Rents and other sums agreed to be paid
hereunder, such additional sums as the court may adjudge reasonable as
attorneys' fees in any successful suit or action instituted by Landlord to
enforce the provisions of this Lease or the collections of the Rents or other
sums due Landlord hereunder.
No receipt of moneys by Landlord from Tenant after the cancellation
or termination hereof in any manner as herein provided, or in any manner
provided by law, shall reinstate, continue or extend the Term, or affect any
notice theretofore given to Tenant or operate as a waiver of the right of
Landlord to recover possession of the Leased Premises by proper suit, action,
proceeding or other remedy; it being agreed that after service of Notice to
cancel or terminate as herein provided, after the commencement of any suit,
action, proceeding or other remedy, or after final order or judgment for
possession of the Leased Premises, Landlord, in any of such instances, may
demand, receive and collect any moneys due, or thereafter falling due,
without in any manner affecting such Notice, suit, action, proceeding, order
or judgment; and any and all such moneys so collected shall be deemed to be
payments on account of Tenant's liability hereunder.
In the event of a breach or threatened breach by Tenant of any of
the agreements, terms, covenants or conditions hereof, Landlord shall have
the right of injunction to restrain the same and the right to invoke any
remedy allowed by law or in equity.
The enumeration anywhere in this Lease of certain rights and/or
remedies of Landlord shall not be construed to be in exclusion or
substitution of any others conferred under this Lease or applicable law. All
the rights and remedies herein given to the Landlord for the recovery of the
Leased Premises because of the Default by the Tenant in the payment of any
sums which may be payable pursuant to the terms of this Lease, or upon the
breach of any of the terms hereof, or the right to re-enter and take
possession of the Leased Premises upon the happening of any of the Defaults
or breaches of any of the said covenants, or the right to maintain any action
for Rents or damages, hereby are reserved and conferred upon the Landlord as
distinct, separate and cumulative remedies, and no one of them, whether
exercised by the Landlord or not, shall be deemed to be in exclusion of any
of the others, but all rights, remedies and powers provided for in this Lease
may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law in the State of Colorado. All
provisions of this Lease are and are intended to be subject to all applicable
mandatory provisions of law that may be controlling in the State of Colorado
and may be limited to the extent necessary so that they will not render this
Lease invalid or unenforceable, in whole or in part, under the provisions of
applicable law. Any provision of this Lease prohibited by law shall be
ineffective to the extent of such prohibition without invalidating the
remaining provisions of this Lease.
SECTION 11.03. WAIVERS. LANDLORD AND TENANT WAIVE, TO THE EXTENT
PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE,
THE RELATIONSHIP OF LANDLORD AND TENANT AND/OR TENANT'S USE OR OCCUPANCY OF
THE LEASED PREMISES. TENANT WAIVES, TO THE EXTENT PERMITTED BY LAW, THE
BENEFIT OF ANY LAWS NOW OR HEREAFTER IN FORCE EXEMPTING PROPERTY FROM
LIABILITY FOR RENT OR FOR DEBT. FURTHERMORE, TENANT HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM LANDLORD AND/OR LANDLORD'S
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR THEIR SUCCESSOR AND ASSIGNS
WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM BROUGHT BY TENANT AGAINST LANDLORD AND/OR LANDLORD'S
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR THEIR SUCCESSOR AND ASSIGNS
WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR
ANY DOCUMENTS CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY TENANT OF
ANY RIGHT IT MAY HAVE TO SEEK SUCH DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES
AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
SECTION 11.04. APPLICATION OF FUNDS. Any payments received by
Landlord under any of the provisions of this Lease during the existence or
continuance of any Default or Event of Default (and any payment made to
Landlord rather than Tenant due to the existence of any Default or Event of
Default) shall be applied to Tenant's obligations under this Lease in such
order as Landlord may determine or as may be prescribed by the laws of the
State of Colorado.
SECTION 11.05. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. If (a) a
Default shall have occurred and is continuing which in the reasonable
judgment of Landlord requires immediate action on the part of Landlord or (b)
an Event of Default shall have occurred and is continuing, Landlord, after
Notice to Tenant (which Notice need not precede such action if Landlord shall
reasonably determine immediate action is necessary to protect person or
property), without waiving or releasing any obligation of Tenant and without
waiving or releasing any Event of Default, may (but shall not be obligated
to), at any time thereafter, make such payment or perform such act for the
account and at the expense of Tenant, and may, to the maximum extent
permitted by law, enter upon the Leased Premises or any portion thereof for
such purpose and take all such action thereon as, in Landlord's sole and
absolute discretion, may be necessary or appropriate therefor, including the
management of the Leased Premises by Landlord or its designee, and Tenant
hereby irrevocably appoints, in the event of such election by Landlord,
Landlord or its designee as the operator of the Leased Premises and its
attorney-in-fact for such purpose, irrevocably and coupled with an interest,
in the name, place and stead of Tenant. No such entry shall be deemed an
eviction of Tenant. All reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred by Landlord in connection
therewith, together with interest thereon (to the extent permitted by law) at
the rate of eighteen percent (18%) per annum from the date such sums are paid
by Landlord until repaid, shall be paid by Tenant to Landlord, on demand.
ARTICLE XII
HOLDING OVER
SECTION 12.01. HOLDING OVER. Any holding over by Tenant after the
expiration or sooner termination of this Lease (other than with the express
written consent of Landlord) shall be treated as a tenancy at sufferance at a
rate equal to (a) three (3) times one-twelfth of the aggregate Minimum Rent
payable with respect to the last year of the Term, (b) all Additional Rent
accruing during the applicable period, and (c) all other sums, if any,
payable by Tenant under this Lease with respect to the Leased Premises during
the applicable period. Tenant shall also pay to Landlord all damages (direct
or indirect) sustained by reason of any such holding over. Otherwise, such
holding over shall be on the terms and conditions set forth in this Lease, to
the extent applicable. Nothing contained herein shall constitute the consent,
express or implied, of Landlord to the holding over of Tenant after the
expiration or earlier termination of this Lease.
ARTICLE XIII
SUBLETTING AND ASSIGNMENT; BANKRUPTCY
SECTION 13.01. SUBLETTING AND ASSIGNMENT. Tenant shall not, without
the prior written consent of Landlord (which consent may be withheld in
Landlord's sole and absolute discretion), assign, mortgage, pledge,
hypothecate, encumber or otherwise transfer this Lease or any interest
therein, or any sublease (which term shall be deemed to include the granting
of concessions, licenses and the like), or all or any part of the Leased
Premises, or suffer or permit this Lease or the leasehold estate created
hereby or any other rights arising under this Lease to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law, or permit
the use or occupancy of the Leased Premises by anyone other than Tenant, or
permit the Leased Premises to be offered or advertised for assignment, and
any of the foregoing actions shall be voidable at Landlord's option.
If this Lease is assigned or if the Leased Premises or any part
thereof is sublet in contravention of this Lease, Landlord may collect the
rents from such assignee, subtenant or occupant, as the case may be, and
apply the net amount collected to the Rents herein reserved, but no such
collection shall be deemed (a) a waiver of the provisions set forth in the
first paragraph of this Section 13.01, (b) the acceptance by Landlord of such
assignee, subtenant or occupant, as the case may be, as a tenant, or (c) a
release of Tenant from the future performance by Tenant of its covenants,
agreements or obligations contained in this Lease.
No subletting or assignment shall in any way impair the continuing
primary liability of Tenant hereunder, and no consent to any subletting or
assignment in a particular instance shall be deemed to be a waiver of the
prohibition set forth in this Section 13.01. No assignment, subletting or
occupancy shall affect any Primary Intended Use. No assignment, subletting or
occupancy shall imply consent to the continued existence of this Lease or any
sublease of the Leased Premises in the event of foreclosure by any Facility
Mortgagee. Any subletting, assignment or other transfer of Tenant's interest
under this Lease in contravention of this Article XIII shall be voidable at
Landlord's option.
SECTION 13.02. NO RIGHT OF TENANT TO MORTGAGE ITS LEASEHOLD.
Notwithstanding any
other provision of this Lease to the contrary, Tenant shall not assign its
interest in this Lease as collateral for Indebtedness.
SECTION 13.03. LANDLORD'S RIGHT TO ASSIGN. Landlord shall have the
right to assign or sell its interest in this Lease and in the Leased
Premises. Upon such sale Landlord shall be released from any further
obligations and responsibilities under this Lease, both before and after the
date of said assignment or sale and Tenant agrees to attorn to and to look
solely to such assignee, purchaser or successor in interest of Landlord for
the continued performance of the obligations of Landlord hereunder.
SECTION 13.04. ASSIGNMENT IN CONTEXT OF BANKRUPTCY OR INSOLVENCY.
(a) (i) In the event that Tenant shall become a Debtor under
Chapter 7 of the Bankruptcy Code, and the Trustee or Tenant shall elect
to assume this Lease for the purpose of assigning the same or
otherwise, such election and assignment may only be made if all of the
terms and conditions of this subsection (i) are satisfied. If such
Trustee shall fail to elect or assume this Lease within sixty (60) days
after the filing of the bankruptcy petition, this Lease shall be deemed
to have been rejected. Landlord shall be thereupon immediately entitled
to possession of the Leased Premises without further obligation to
Tenant or Trustee, and this Lease shall be terminated, but Landlord's
right to be compensated for damages in such liquidation proceeding
shall survive.
No election by the Trustee or Debtor-In-Possession to assume
this Lease, whether under Chapters 7 or 11, shall be effective
unless each of the following conditions, which Landlord and
Tenant acknowledge are commercially reasonable in the context
of a bankruptcy case of Tenant, have been satisfied, and
Landlord has so acknowledged in writing, which acknowledgment,
provided each of the following criteria has been met, shall
not be unreasonably withheld:
(A) Landlord has not terminated this Lease
pursuant to the provisions established herein prior
to the filing of the bankruptcy petition.
(B) The Trustee or the Debtor-In-Possession
has cured:
(1) all monetary Defaults under this
Lease; and
(2) all nonmonetary Defaults under
this Lease.
(C) The Trustee or the Debtor-In-Possession
has compensated any pecuniary loss (including any and
all attorneys' fees and expenses) incurred by
Landlord arising from the Default of Tenant, the
Trustee, or the Debtor-In-Possession as recited in
Landlord's written statement of pecuniary loss sent
to the Trustee or Debtor-In-Possession.
(D) The Trustee or the Debtor-In-Possession
has provided Landlord with adequate assurance (as
defined below) of the future performance of each of
Tenant's, Trustee's or Debtor-In-Possession's
obligations under this Lease; PROVIDED, HOWEVER,
that:
(1) the Trustee or
Debtor-In-Possession also shall deposit
with Landlord, as security, for the
timely payment of rent, an amount equal
to three (3) months' Minimum Rent and
other monetary charges accruing under
this Lease;
(2) if not otherwise required by the
terms of this Lease, the Trustee or
Debtor-In-Possession also shall pay in
advance on the date Minimum Rent is payable,
one-twelfth of Tenant's annual obligations
under this Lease for Impositions, Real
Estate Taxes, Utility Charges, Insurance
Premiums and similar charges; and
(3) the obligations imposed upon the
Trustee or Debtor-In-Possession shall
continue with respect to Tenant or any
assignee of the Lease after the completion
of the bankruptcy case.
(E) For purposes of this subsection (i),
Landlord and Tenant acknowledge that, in the context
of a bankruptcy case of Tenant, at a minimum,
"adequate assurance" means:
(1) the Trustee or the
Debtor-In-Possession has and will continue
to have sufficient current assets after the
payment of all current obligations and
administrative expenses then due to assure
Landlord that the Trustee or
Debtor-In-Possession will have sufficient
funds to fulfill the obligations of Tenant
under this Lease; and
(2) the Bankruptcy Court shall have
entered an order segregating sufficient cash
payable to Landlord to cure the monetary
and/or nonmonetary Defaults under this
Lease.
(ii) If the Trustee or Debtor-In-Possession has
assumed the Lease pursuant to the terms and provisions herein,
for the purpose of assigning (or electing to assign) Tenant's
interest under this Lease or the estate created thereby, to
any other person, such interest or estate may be so assigned
only if Landlord shall acknowledge in writing that the Trustee
or Debtor-in-Possession has satisfied the conditions in
Sections 13.04(a)(i)(B), (C) and (D) above and that the
intended assignee has provided "adequate assurance of future
performance" as defined in this subsection (ii) of all of the
terms, covenants and conditions of this Lease to be performed
by Tenant.
For purposes of this subsection (ii), Landlord and
Tenant acknowledge that, in the context of a bankruptcy case
of Tenant, at a minimum "adequate assurance of future
performance" means that each of the following conditions has
been satisfied, and Landlord has so acknowledged in writing:
(A) the assignee has submitted a current
financial statement audited by a certified public
accountant which shows a net worth and working
capital in amounts determined to be sufficient by
Landlord to assure the future performance by such
assignee of Tenant's obligations under this Lease;
(B) the assignee, if requested by Landlord,
shall have obtained guarantees in form and substance
satisfactory to Landlord from one or more persons who
satisfy Landlord's standards of credit worthiness;
(C) the assignee has submitted in writing
evidence, satisfactory to Landlord, of substantial
experience in the operation of the business permitted
under this Lease; and
(D) Landlord has obtained all consents or
waivers from any third party required under any
lease, mortgage, financing arrangement or other
agreement by which Landlord is bound to permit
Landlord to consent to such assignment.
(iii) Neither Tenant's interest in the Lease, nor any
lesser interest of Tenant herein, nor any estate of Tenant
hereby created, shall pass to any trustee, receiver, assignee
for the benefit of creditors, or any other person or entity,
or otherwise by operation of law under the laws of any state
having jurisdiction of the person or property of Tenant
(hereinafter referred to as the "state law") unless Landlord
shall consent to such transfer in writing. No acceptance by
Landlord of rent or any other payments from any such trustee,
receiver, assignee, person or other entity shall be deemed, to
have waived, nor, shall it waive the need to obtain Landlord's
consent for, Landlord's right to terminate this Lease for any
transfer of Tenant's interest under this Lease without such
consent.
(iv) In the event that the estate of Tenant created
hereby shall be taken in execution or by other process of law,
or if Tenant or any guarantor of Tenant's obligations
hereunder shall be adjudicated insolvent pursuant to the
provisions of any present or future insolvency law under state
law, or if any proceedings are filed by or against any
guarantor under the Bankruptcy Code, or any similar provisions
of any future federal bankruptcy law, or if a Receiver or
Trustee of the property of Tenant or any guarantor shall be
appointed under state law by reason of Tenant's or any
guarantor's insolvency or inability to pay its debts as they
become due or otherwise, or if any assignment shall be made of
Tenant's or any guarantor's property for the benefit of
creditors under state law, then and in such event Landlord
may, at its option, terminate this Lease and all rights of
Tenant hereunder by giving Tenant written notice of the
election to so terminate within thirty (30) days after the
occurrence of such event.
(v) Notwithstanding any provision contained herein,
neither Tenant nor the Trustee shall have the right to assign
this Lease or sublet the Leased Premises
or any portion thereof to an assignee or sublessee that (A)
is a competitor of Landlord or (B) is not a capable,
reliable, qualified Person of good reputation and character
with the financial capacity to satisfy Tenant's obligations
under this Lease. THE TRUSTEE SHALL NOT HAVE THE RIGHT TO
ASSIGN THIS LEASE OR SUBLET THE LEASED PREMISES TO A REAL
ESTATE INVESTMENT TRUST THAT IS, OR INTENDS TO BE, PUBLICLY
TRADED. [?]
SECTION 13.05. Other Bankruptcy Issues.
(a) As a material inducement to Landlord executing this
Lease, Tenant acknowledges and agrees that Landlord is relying upon:
(i) the financial condition and specific operating experience of
Tenant; (ii) Tenant's timely performance of all of its obligations
under this Lease notwithstanding the entry of an order for relief
under the Bankruptcy Code for Tenant; and (iii) all defaults under
the Lease being cured promptly and the Lease being assumed within
sixty (60) days of any order for relief entered under the Bankruptcy
Code for Tenant, or the Lease being rejected within such sixty (60)
day period and the Leased Premises surrendered to Landlord.
Accordingly, in consideration of the mutual
covenants contained in this Lease and for other good and
valuable consideration, Tenant hereby agrees that:
all obligations that accrue under this Lease
(including the obligation to pay Rent), from and after the
date that a bankruptcy case is commenced shall be timely
performed exactly as provided in this Lease and any failure
to so perform shall be harmful and prejudicial to Landlord;
any and all Rents that accrue from and after the
date that a bankruptcy case is commenced and that are not
paid as required by this Lease shall, in the amount of such
Rents, constitute administrative expense claims allowable
under the Bankruptcy Code with priority of payment at least
equal to that of any other actual and necessary expenses
incurred after the commencement of such proceeding;
any extension of the time period within which the
Tenant may assume or reject the Lease without an obligation
to cause all obligations under the Lease to be performed as
and when required under the Lease shall be harmful and
prejudicial to Landlord;
any time period designated as the period within
which the Tenant must cure all defaults and compensate
Landlord for all pecuniary losses which extends beyond the
date of assumption of the Lease shall be harmful and
prejudicial to Landlord;
any assignment of the Lease must result in all terms
and conditions of the Lease being assumed by the assignee
without alteration or amendment, and any assignment which
results in an amendment or alteration of the terms and
conditions of the Lease without the express written consent
of Landlord shall be
harmful and prejudicial to Landlord;
any proposed assignment of the Lease to an assignee
that does not possess the financial condition, operating
performance and experience characteristics equal to or better
than the financial condition, operating performance and
experience of Tenant as of the Commencement Date, shall be
harmful and prejudicial to Landlord; and
the rejection (or deemed rejection) of the Lease for
any reason whatsoever shall constitute cause for immediate
relief from the automatic stay provisions of the Bankruptcy
Code, and Tenant stipulates that such automatic stay shall be
lifted immediately and possession of the Leased Premises will
be delivered to Landlord immediately without the necessity of
any further action by Landlord.
(b) No provision of this Lease shall be deemed a waiver of
Landlord's rights or remedies under the Bankruptcy Code or applicable
law to oppose any assumption and/or assignment of this Lease, to
require timely performance of Tenant's obligations under this Lease, or
to regain possession of the Leased Premises as a result of the failure
of Tenant to comply with the terms and conditions of this Lease or the
Bankruptcy Code.
(c) Notwithstanding anything in this Lease to the contrary,
all amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated as such, shall constitute
"rent" for the purposes of the Bankruptcy Code.
(d) For purposes of this Section addressing the rights and
obligations of Landlord and Tenant in the event that a bankruptcy
action is commenced, the term "Tenant" shall include Tenant's successor
in bankruptcy, whether a trustee, Tenant as Debtor-in-Possession or
other responsible person.
ARTICLE XIV
ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
SECTION 14.01. ESTOPPEL CERTIFICATES. A party, without charge, at any
time and from time to time hereafter, within five (5) days after written request
of the other party, shall certify by written instrument duly executed and
acknowledged to any person, firm or corporation specified in such request: (a)
as to whether this Lease has been supplemented or amended, and if so, the
substance and manner of such supplement or amendment; (b) as to the validity and
force and effect of this Lease in accordance with its terms as then constituted;
(c) as to the existence of any Default hereunder; (d) as to the existence of any
offsets, counterclaims or defenses hereto; (e) as to the commencement and
expiration dates of the Term of this Lease; and (f) as to any other matters as
reasonably may be so requested. Any such certificate may be relied upon the
party requesting it and any other person, firm or corporation to whom the same
may be exhibited or delivered, and the contents of such certificate shall be
binding on Tenant.
SECTION 14.02. FINANCIAL STATEMENTS. On an annual basis, during the
Term of this
Lease, Tenant shall furnish to Landlord, within fifteen (15) days immediately
following a request for the same made by Landlord, a current financial statement
of Tenant, certified by an authorized officer of Tenant to be true and correct
and, if available, a current financial statement prepared by a licensed
certified public accountant.
ARTICLE XV
LANDLORD'S RIGHT TO INSPECT
SECTION 15.01. RIGHT TO INSPECT. Landlord and its designees shall have
the right to enter upon the Leased Premises at all reasonable business hours
(and in Emergency Situations at all times): (a) to inspect the same, and/or to
prepare or have prepared on its behalf an inspection report as to the condition
of the Leased Premises; (b) to make repairs, additions or alterations to the
Leased Premises pursuant to the provisions of Article V hereof and/or as may be
required by an inspection report prepared by or on behalf of Landlord; and (c)
for any lawful purpose. If Landlord makes or causes any repairs to be made
pursuant to Article V hereof, Landlord shall not be responsible to Tenant or to
any of Tenant's subtenants for any loss or damage that may accrue to Tenant's
and/or any subtenant's stock or business by reason thereof, unless such damage
is due to the gross negligence or intentional misconduct of Landlord, its
agents, employees or contractors.
For a period commencing 90 days prior to the end of the Term, Landlord
may have reasonable access to the Leased Premises for the purpose of showing and
exhibiting the same to prospective purchasers or tenants and Landlord shall have
the right to display and to post any "To Let" or "For Sale" signs upon the
Leased Premises.
ARTICLE XVI
FACILITY MORTGAGES
SECTION 16.01. LANDLORD MAY GRANT LIENS.
(a) Without the consent of Tenant, Landlord may, subject to
the terms and conditions set forth in this Section 16.01, from time to
time, directly or indirectly, create or otherwise cause to exist any
Lien upon its interest in the Leased Premises, or any portion thereof
or interest therein, whether to secure any borrowing or other means of
financing or refinancing; PROVIDED, HOWEVER, that any such Lien: (i)
shall not modify the terms of this Lease, except as expressly set forth
in Section 16.02; (ii) shall not contain more restrictive terms and
conditions than those currently contained in any Facility Mortgage;
(iii) shall provide that any insurance proceeds payable with respect to
a Casualty shall be paid directly to Landlord unless Landlord is in
default under the terms of any Facility Mortgage; and (iv) shall
provide that so long as no Event of Default has occurred, neither
Tenant nor any subtenant shall be disturbed in its possession of the
Premises.
(b) Tenant shall, upon the request of Landlord or
any existing, potential or
future Facility Mortgagee, and to the extent in Tenant's possession,
(i) provide Landlord or the Facility Mortgagee with copies of all
Licenses, permits, occupancy agreements, operating agreements, leases,
contracts, inspection reports, studies, appraisals, assessments,
default or other notices and similar materials reasonably requested in
connection with any existing or proposed financing of the Leased
Premises, and (ii) execute such estoppel certificates and collateral
assignments with respect to the Leased Premises' Licenses and any of
the other aforementioned agreements as any Facility Mortgagee may
reasonably request in connection with any such financing; PROVIDED
HOWEVER, that no such estoppel certificate or collateral assignment
shall, except as expressly set forth in Section 16.02, modify the
terms of this Lease.
SECTION 16.02. SUBORDINATION OF LEASE. Subject to Section 16.01, this
Lease, and any and all rights of Tenant hereunder, are and shall be subject and
subordinate to any Facility Mortgage, and all renewals, extensions,
modifications, consolidations and replacements thereof, and to each and every
advance made or hereafter to be made under any such Facility Mortgage. This
section shall be self-operative and no further instrument of subordination shall
be required. In confirmation of such subordination, Tenant shall promptly
execute, acknowledge and deliver any instrument that Landlord or the holder of
any such mortgage or the trustee or beneficiary of any deed of trust or any of
their respective successors in interest may reasonably request to evidence such
subordination. Tenant shall not unreasonably withhold its consent to any
amendment to this Lease reasonably required by such lender, provided that such
amendment does not (a) increase Tenant's Rent obligations or other financial
obligations hereunder, or (b) have a material adverse effect upon Tenant's
rights hereunder, or (c) materially increase Tenant's non-economic obligations
hereunder, or (d) decrease Landlord's obligations hereunder. Landlord shall
exercise commercially reasonable efforts to require any future Facility
Mortgagee to provide Tenant with notice and an opportunity to cure landlord
defaults under the Facility Mortgage. Tenant shall have no obligations under any
Facility Mortgage other than those expressly set forth in this Section 16.02.
In the event of a foreclosure of any Facility Mortgage by any Facility
Mortgagee, Landlord and such Facility Mortgagee covenant and agree that they
shall not disturb Tenant's or any subtenants' possession, use and enjoyment of
the Leased Premises during the Term, provided that there is no Default or Event
of Default hereunder. Each Facility Mortgagee shall have an obligation to
provide a non-disturbance agreement to Tenant; PROVIDED, HOWEVER, that any
Facility Mortgagee shall have the right (subject to the provisions of the next
paragraph) to terminate this Lease upon the foreclosure, deed in lieu of
foreclosure or exercise of the power of sale with respect to the Leased
Premises.
In the event that any Facility Mortgagee or the nominee or designee of
any Facility Mortgagee shall succeed to the rights of Landlord under this Lease
(any such person, "Successor Landlord"), whether through possession or
foreclosure action or delivery of a new lease or deed, or otherwise, such
Successor Landlord shall recognize Tenant's rights under this Lease as herein
provided and Tenant shall attorn to and recognize the Successor Landlord as
Tenant's landlord under this Lease and Tenant shall promptly execute and deliver
any instrument that such Successor Landlord may reasonably request to evidence
such attornment (provided that such instrument does not alter the terms of this
Lease), whereupon, this Lease shall continue in full
force and effect as a direct lease between the Successor Landlord and Tenant
upon all of the terms, conditions and covenants as are set forth in this Lease,
except that the Successor Landlord (unless formerly the landlord under this
Lease or its nominee or designee) shall not be (a) liable in any way to Tenant
for any act or omission, neglect or default on the party of any prior Landlord
under this Lease, (b) responsible for any monies owing by or on deposit with any
prior Landlord to the credit of Tenant (except to the extent actually paid or
delivered to the Successor Landlord), (c) subject to any counterclaim or setoff
which theretofore accrued to Tenant against any prior Landlord, (d) bound by any
modification of this Lease subsequent to such Facility Mortgage, (e) liable to
Tenant beyond the Successor Landlord's interest in the Leased Premises and the
rents, income, receipts, revenues, issues and profits issuing from the Leased
Premises, (f) responsible for the performance of any work to be done by Landlord
under this Lease to render the Leased Premises ready for occupancy by Tenant
(subject to Landlord's obligations) or with respect to any insurance or
Condemnation proceeds, or (g) required to remove any Person occupying the Leased
Premises or any part thereof, except if such Person claims by, through or under
the Successor Landlord. Tenant agrees at any time and from time to time to
execute a suitable instrument in confirmation of Tenant's agreement to attorn,
as aforesaid.
SECTION 16.03. NOTICE TO MORTGAGEE. No Default Notice from Tenant to
Landlord as to the Leased Premises shall be effective unless and until a copy of
the same is given to Facility Mortgagee(s) of which Landlord gives notice
thereof to Tenant, which includes the Leased Premises as part of the demised
premises and which complies with Sections 16.01 and 16.02 (which Notice shall
include a copy of the applicable mortgage). No Default Notice from Tenant to
Landlord hereunder shall be effective unless and until a copy of the same is
given to a Facility Mortgagee at the address set forth in such Notice.
SECTION 16.04. ATTORNMENT. Tenant agrees to attorn: (i) to any assignee
of Landlord; (ii) to the holder of any Facility Mortgage to which this Lease is
subordinate; or (iii) to any party acquiring title to the Leased Premises
pursuant to any right or any power contained in any such Facility Mortgage or
bond or other mortgage instrument or as authorized by law. Neither the
provisions for subordination nor attornment set forth in this Article XVI shall
require the execution of any further instrument.
ARTICLE XVII
TENANT'S REPRESENTATIONS AND WARRANTIES
SECTION 17.01. REPRESENTATIONS AND WARRANTIES OF TENANT. To induce
Landlord to enter into this Lease, Tenant hereby represents and warrants to
Landlord, which representations shall be true and accurate as of the
Commencement Date, as follows:
DUE ORGANIZATION AND AUTHORITY. Tenant is duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its organization and Tenant has all requisite power and
authority to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted.
Tenant is duly qualified or licensed to do business in all
jurisdictions in which it owns or leases assets and property or
in which the conduct of its business requires it to so qualify or
be
licensed.
DUE AUTHORIZATION AND EXECUTION, ETC. The execution, delivery and
performance by Tenant of this Lease, and the consummation of the
transactions contemplated herein, are within the Tenant's powers,
have been duly authorized by all necessary action, do not
contravene: (i) Tenant's organizational documents; or (ii) any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any material contractual restriction
binding on or affecting Tenant or any of its properties and do
not result in or require the creation of any lien, security
interest or other charge or encumbrance upon or with respect to
any of Tenant's properties. Tenant is not in default under any
such law, rule, regulation, order, writ, judgment, injunction,
decree, determination, award or restriction.
GOVERNMENT CONSENTS. No authorization, consent, approval or other
action by, and no notice to or filing with, any Government
Agencies or regulatory body is required for the due execution,
delivery or performance by Tenant of this Lease.
LEGAL, VALID AND BINDING NATURE. This Lease, when executed and
delivered hereunder will be the legal, valid and binding
obligations of Tenant, enforceable against Tenant and in
accordance with its terms, except to the extent that the
enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws generally
affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at
law).
ACCURACY OF INFORMATION. Any financial information provided to
Landlord will fairly present the financial condition of Tenant
for the applicable periods and will all be in accordance with
generally accepted accounting principles consistently applied.
FRAUDULENT TRANSFER AND REASONABLY EQUIVALENT VALUE. Tenant
hereby confirms that this Lease is not being entered into with
the intent to hinder, delay or defraud any entity to which Tenant
is indebted, and Tenant's intention that this Lease not
constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Code, the Colorado Uniform Fraudulent Transfer Act
or any similar federal or state law. Tenant is not insolvent and
will not become insolvent as a result of the execution and
performance of its obligations under this Lease. Tenant has
sufficient capital to honor its obligations and to pay its debts
as they mature now and after the execution of this Lease.
ARTICLE XVIII
ADDITIONAL AGREEMENTS OF PARTIES
SECTION 18.01. ADDITIONAL AFFIRMATIVE COVENANTS OF TENANT. Tenant
covenants and agrees, at its own cost and expense, to comply with the following:
(a) CONDUCT OF BUSINESS. Tenant shall do or cause to be done
all things
necessary to preserve, renew and keep in full force and effect and in
good standing its existence and its rights and Licenses necessary to
conduct such business.
(b) MAINTENANCE OF ACCOUNTS AND RECORDS. Tenant shall keep
records and books of account in which full, true and correct entries in
all material respects will be made of dealings and transactions in
relation to the business and affairs of Tenant.
(c) KEEP LEASED PREMISES CLEAN. Tenant shall keep the Leased
Premises in the sanitary condition required by health, sanitary and
police regulations or ordinances of the County of Denver, State of
Colorado, and keep and maintain all of said buildings, building
improvements, land improvements, fixtures, machinery and equipment
located thereon in good order, condition and repair and with a market
value at least equal to the market value thereof as of the commencement
of this Lease.
SECTION 18.02. ADDITIONAL NEGATIVE COVENANTS OF TENANT. Tenant
covenants and agrees that it shall not at any time without first obtaining
Landlord's written consent, do any of the following:
(a) NO LIENS. Tenant shall not subject any fixtures,
furnishings or equipment to or on the Leased Premises and affixed to
the realty so as to become part thereof, to any Liens.
(b) NO DAMAGE TO THE LEASED PREMISES. Tenant shall not commit
any waste to any of the buildings, building improvements, land
improvements, fixtures, machinery and equipment located on the Leased
Premises, or perform any act or carry on any practice which may damage,
mar or deface the Leased Premises, or which would cause the walls or
floors thereof to be endangered by overloading.
(c) NO JUDGMENTS AND ENCUMBRANCES. Tenant shall not allow any
judgments or encumbrances of any kind or nature whatsoever to attach to
the Leased Premises or to this Lease or any interest or interests
therein.
(d) PROHIBITED USE OF LEASED PREMISES. Without the prior
consent of Landlord, which consent may be granted or withheld in
Landlord's sole discretion, Tenant shall not, and shall not authorize
its subtenants to, permit the Leased Premises to be used for the
training of pilots by any person who does not keep and maintain a valid
license to engage in such practice pursuant to the laws of the State of
Colorado and any applicable federal regulatory requirements, and all
expenses for such compliance shall be paid by Tenant and/or its
subtenants.
SECTION 18.03. SIGNS. Landlord shall provide and install, at Tenant's
sole expense and in conformity with all applicable laws, ordinances, regulations
rules and statutes, all letters or numerals at the entrance to the Building and
the Leased Premises requested by Tenant. All such letters and numerals shall be
of a type consistent with that used for signs in other parts of the Building.
Landlord shall not be liable for any inconvenience or damage occurring as a
result of any error or omission in any signs requested by Tenant. No signs,
numerals, letters or other
graphics shall be used or permitted on the exterior of, or which may be visible
from outside, the Leased Premises except those signs for which drawings are
submitted to Landlord in writing and approved by Landlord in writing. Landlord
reserves the right to remove at Tenant's expense all signs other than signs
approved in writing by Landlord under this Section without Notice to Tenant and
without liability to Tenant for any damages sustained by Tenant as a result
thereof. Tenant shall remove all of its signs upon the expiration of the Term
hereof or any earlier termination of this Lease as herein provided and shall
repair any damage resulting therefrom at its own cost and expense. Any such
signs not removed upon the expiration of the Term hereof or any earlier
termination as herein provided shall become the property of Landlord.
SECTION 18.04. NO POWER IN TENANT TO CHARGE REVERSION. Tenant shall not
have the power to do any act or make any contract which may create or be the
foundation for any lien upon the present estate, reversion or any other estate
of Landlord in the Leased Premises herein demised or the buildings or
improvements thereon.
SECTION 18.05. RIGHT OF REDEMPTION. Tenant covenants and agrees that in
the event of the termination of this Lease by summary proceedings or in the
event of the entry of a judgment for the recovery of the possession of the
Leased Premises in any action of ejectment, or if Landlord enters by process of
law or otherwise, as herein provided, the right of redemption provided or
permitted by any statute, law or decision now or hereafter in force, and the
right to any second and further trial provided or permitted by any statute, law
or decision now or hereafter in force shall be and hereby are waived expressly
by Tenant. Tenant, for itself, its successors, heirs, administrators, executors
and assigns, and on behalf of any and all persons claiming by, through or under
Tenant, together with creditors of all classes, hereby does waive, surrender,
and give up all right or privilege which it or they may or might have under any
statute, law or decision now in effect, or by reason of any other present or
future law or decision, to redeem the Leased Premises or have a continuance of
this Lease for the Term hereby demised after having been dispossessed or ejected
therefrom by process of law or as provided under the terms hereof.
SECTION 18.06. QUIET ENJOYMENT. Landlord covenants that upon Tenant
paying the Rents due hereunder and duly performing and observing all of Tenant's
other Lease obligations, covenants and agreements, Tenant peaceably and quietly
may have, hold and enjoy the Leased Premises for the Lease Term, subject and
subordinate as provided in this Lease. Landlord shall have no liability
whatsoever to Tenant for any breach of this covenant occasioned by the acts or
omissions of any subtenant, or any transferee, successor or assignee of
Landlord.
SECTION 18.07. RELATIONSHIP OF PARTIES. Nothing contained in this Lease
shall be construed to create the relationship of principal and agent,
partnership, joint venture or any other relationship between the parties hereto
other than the relationship of Landlord and Tenant.
SECTION 18.08. NOTICES. All notices, demands, requests, consents,
approvals or other instruments required or permitted to be given pursuant to
this Lease (individually, "Notice" and collectively, "Notices") shall be in
writing and given by (i) hand delivery, (ii) facsimile, (iii) express overnight
delivery service or (iv) certified or registered mail, return receipt requested,
and shall be deemed to have been delivered upon (a) receipt, if hand delivered,
(b) transmission, if
delivered by facsimile during normal business hours, (c) the next Business Day,
if delivered by express overnight delivery service or (d) the third Business Day
following the day of deposit of such notice with the United States Postal
Service, if sent by certified or registered mail, return receipt requested.
Notices shall be provided to the addresses (or facsimile numbers, as applicable)
specified below:
If to Landlord: AIMS CONTINUING EDUCATION AUTHORITY
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Attn: ____________
Fax: (___) ___-____
Telephone: (___) ___-____
with copies to: XXXXX XXXX
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
Telephone: (000) 000-0000
If to Tenant: TRAINING DEVICES INC.
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx #0X
Xxxxxxxxx, Xxxxxxxx 00000
Attention: __________
Fax: (___) ___-____
Telephone: (___) ___-____
with a copy to: ___________________
___________________
_______, Colorado ______
Attn: __________________
Fax: (___) ___-____
Telephone: (___) ___-____
or to such other address or addresses as either may give to the other party,
from time to time, by notice as herein provided.
SECTION 18.09. WAIVER. One or more waivers of any covenant or condition
by Landlord shall not be construed as a waiver of a subsequent breach of the
same or any other covenant or condition and the consent or approval of any
subsequent similar act by Tenant. The receipt of any amounts whether
specifically reserved or payable under any of the covenants herein contained, or
of any portion thereof, after a Default or Event of Default hereunder, whether
or not any such amount becomes due before or after such Default or Event of
Default, shall not be deemed to operate as a waiver of any other Default or
Event of Default or of the right of Landlord to enforce the payment of any Rents
herein reserved or to declare a forfeiture of this Lease and to
recover possession of the Leased Premises as provided hereunder. The remedies
provided in this Lease shall be cumulative and shall not in any way abridge,
modify or preclude any other rights or remedies to which the Landlord may be
entitled either at law or in equity.
SECTION 18.10. GENDER. Wherever herein the singular number is used, the
same shall include the plural and the masculine gender shall include the
feminine and neuter genders.
SECTION 18.11. COVENANTS. Each and every term and provision of this
Lease which requires any performance (whether affirmative or negative) by Tenant
shall be deemed to be both a covenant and a condition.
SECTION 18.12. CHOICE OF LAW. The parties agree that this Lease shall
be governed by and construed in accordance with the laws of the State of
Colorado.
SECTION 18.13. COMMENCEMENT. Tenant hereby recognizes and agrees that
this Lease shall have no force or validity until it is duly executed by Tenant
and Landlord.
SECTION 18.14. CONSENT OR APPROVAL. Wherever in this Lease Landlord
agrees not to unreasonably withhold its consent or approval, or words of like
import, Tenant agrees that it shall not be unreasonable for Landlord to withhold
such consent or approval: (i) if by granting such consent or approval Landlord
shall be in violation of any Facility Mortgage; or (ii) a Facility Mortgagee
shall not give its consent or approval thereto where its consent or approval is
required by the terms of the any Facility Mortgage.
SECTION 18.15. FORCE MAJEURE. If Landlord or Tenant is in any way
delayed or prevented from performing any obligation, except any monetary
obligation, hereunder due to acts of God, acts of war, civil disturbance, action
of any Government Agency (including the revocation or refusal to grant licenses
or permits, where such revocation or refusal is not due to the fault of the
party whose performance is to be excused for reasons of FORCE MAJEURE), strikes,
fire or other Casualty, or any other cause beyond the reasonable control of
either party (as applicable), then the time for performance of such obligation
shall be excused for the period of such delay or prevention and extended for a
period equal to the period of such delay, interruption or prevention; PROVIDED,
however, that lack of funds shall not be deemed a cause beyond the reasonable
control of a party, unless such lack of funds is caused by the breach of the
other party's obligations under this Lease.
SECTION 18.16. TIME IS OF THE ESSENCE. Time is of the essence with
respect to the exercise of any rights of, and performance of any obligations by,
Tenant or Landlord under this Lease.
SECTION 18.17. Characterization.
(a) TRUE LEASE. Tenant intends for this Lease to be a "true
lease" and not a financing lease, capital lease, mortgage, equitable
mortgage, deed of trust, trust agreement, security agreement or other
financing or trust arrangement, and the economic realities of this
Lease are those of a true lease. The Lease Term, including any term
extensions provided for in this Lease, is less than the remaining
economic life of the
Leased Premises. Tenant waives any claim or defense based upon the
characterization of this Lease as anything other than a true lease,
and Tenant stipulates and agrees not to challenge the validity,
enforceability or characterization of the lease of the Leased Premises
as a true lease and further stipulates and agrees that nothing
contained in this Lease creates or is intended to create a joint
venture, partnership, equitable mortgage, trust, financing device or
arrangement, security interest or the like. Tenant shall support the
intent of the parties that the lease of the Leased Premises pursuant
to this Lease is a true lease and does not create a joint venture,
partnership, equitable mortgage, trust, financing device or
arrangement, security interest or the like, if, and to the extent
that, any challenge occurs.
(b) BUSINESS RELATIONSHIP. It is the intent of the parties
hereto that the business relationship created by this Lease and any
related documents is solely that of a short-term commercial lease
between landlord and tenant and has been entered into by both parties
in reliance upon the economic and legal bargains contained herein. None
of the agreements contained herein is intended, nor shall the same be
deemed or construed, to create a partnership between Landlord and
Tenant, to make them joint venturers, to make Tenant an agent, legal
representative, partner, subsidiary or employee of Landlord, nor to
make Landlord in any way responsible for the debts, obligations or
losses of Tenant.
(c) INTERPRETATION. Landlord and Tenant acknowledge and
warrant to each other that each has been represented by independent
counsel and has executed this Lease after being fully advised by said
counsel as to its effect and significance. This Lease shall be
interpreted and construed in a fair and impartial manner without regard
to such factors as the party which prepared the instrument, the
relative bargaining powers of the parties or the domicile of any party.
Whenever in this Lease any words of obligation or duty are used, such
words or expressions shall have the same force and effect as though
made in the form of a covenant.
SECTION 18.18. PROVISION OF NOTICES AFFECTING LEASED PREMISES. Tenant
agrees to provide Landlord, within two (2) Business Days of Tenant's receipt
thereof, copies of any and all notices received by Tenant that affect or relate
to the Leased Premises in any way whatsoever. Landlord shall give prompt Notice
to Tenant of any matters materially affecting the Leased Premises of which
Landlord receives written notice or actual knowledge.
SECTION 18.19. ATTORNEYS' FEES. If either party shall default in the
performance of any covenants on its part to be performed by virtue of any
provisions of this Lease, the nondefaulting party, immediately, or at any time
thereafter, may perform the same for the account of the defaulting party after
having given the defaulting party notice as called for herein. If a
nondefaulting party at any time is compelled to pay any sum of money, or do any
act which will require the payment of any sum of money by reason of the failure
of the defaulting party hereto to comply with any provisions hereof, or if a
nondefaulting party, is compelled to incur any expense including reasonable
attorneys' fees in investigating, instituting, prosecuting and/or defending any
action or proceeding instituted by reason of any default of such defaulting
party hereunder, the sum or sums so paid by the nondefaulting party with all
interest, costs and damages, shall be
deemed to be due immediately from the defaulting party to the nondefaulting
party on the first day of the month following the incurring of such respective
expenses and in the event the Tenant is the defaulting party, the sums shall be
considered as Additional Rent.
SECTION 18.20. NO MERGER. Landlord's interest hereunder shall not merge
with its interest as Facility Mortgagee under the Facility Mortgage or its
interest under any other document or agreement between Landlord and Tenant
and/or any Affiliates thereof. Landlord's interest herewith shall not merge with
any interest obtained by Landlord by virtue of its exercise of remedies
hereunder or under the Facility Mortgage, it being the express intent of the
parties hereto (which intent shall be binding on third parties to the same
extent) that Landlord's interest hereunder remain independent of the Facility
Mortgagee's interest in, and right and remedies under, the Facility Mortgage.
SECTION 18.21. ENTIRE AGREEMENT.
(a) The covenants, conditions and agreements contained in this
Lease shall bind and inure to the benefit of Landlord and Tenant and
their respective successors, heirs, executors, administrators and,
except as otherwise provided in this Lease, their assigns.
(b) The headings or captions of the Sections hereof are
inserted only as a matter of convenience and reference, are not to be
deemed or construed in any way as part of this Lease, nor as
supplemental hereto or amendatory hereof, in no way define, limit or
otherwise describe the scope of this Lease nor the intent of any term
hereof, and shall not affect the construction of this Lease.
(c) If any term, covenant, condition or provision of this
Lease or the application thereof, to any person or circumstance, at any
time or to any extent, shall be invalid or unenforceable, the remainder
of this Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term, covenant,
conditions and provision of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
(d) This writing AND THE TRAINING CENTER AGREEMENT contain the
entire agreement between the parties hereto, and no agent,
representative, salesman, or officer of either Landlord or Tenant
hereto has authority to make or has made any statement, agreement or
representation, either oral or written, in connection herewith,
modifying, adding or changing the terms and conditions set forth herein
and therein. No dealings between the parties or custom shall be
permitted to contradict or modify any of the terms hereof or thereof.
No modification or waiver of this Lease or any of the terms hereof
shall be valid or be binding unless such modification or waive shall be
in writing and signed by duly authorized officers of both of the
parties hereto.
SECTION 18.22. RECORDING OF MEMORANDUM OF LEASE. The parties agree that
a Memorandum of Lease, in substantially the form attached hereto as SCHEDULE
18.22, may be recorded in the real estate records of the County of ______, State
of Colorado by either party
hereto.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals to be effective as of the day and year first above written.
LANDLORD:
AIMS CONTINUING EDUCATION AUTHORITY
By
Name
Title
TENANT:
TRAINING DEVICES INC.
By
Name
Title
LIST OF SCHEDULES AND EXHIBITS
Schedules
---------
3.02 Wiring Instructions
18.22 Memorandum of Lease
Exhibits
--------
A Description of Land
B Floorplan
C Fixtures
D Specifications
EXHIBIT A
LEGAL DESCRIPTION
Attached hereto is a true and correct legal description of that portion
of the Land owned by Landlord.
EXHIBIT B
FLOORPLAN
Attached hereto is a true and correct floorplan showing the Leased
Premises.
EXHIBIT C
FIXTURES
Attached hereto is a true and correct list of the Fixtures.
EXHIBIT D
SPECIFICATIONS
Attached hereto is a true and correct list of the Specifications.
SCHEDULE 3.02
WIRING INSTRUCTIONS
Attached hereto is a true and correct copy of the wiring instructions
of Landlord.
SCHEDULE 18.22
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (this "Memorandum") is executed effective as
of the ____ day of ________, 1999 (the "Effective Date"), by and between AIMS
CONTINUING EDUCATION AUTHORITY, a Colorado nonprofit corporation ("Landlord"),
whose address is 0000 Xxxx 00xx Xxxxxx, Xxxxxxx, 00000, and TRAINING DEVICES
INC., a Colorado corporation ("Tenant"), whose address is 0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 0X, Xxxxxxxxx, Xxxxxxxx 00000.
PRELIMINARY STATEMENT:
Landlord and Tenant entered into that certain Lease Agreement (the
"Lease") dated as of the Effective Date, the terms, provisions and conditions of
which are incorporated herein by this reference to the same extent as if recited
in their entirety herein, whereby Landlord has leased to Tenant, and Tenant has
leased from Landlord, on and subject to the terms, provisions and conditions of
the Lease, the real property, together with all buildings, structures, fixtures
and improvements thereon, described more particularly in the legal description
attached hereto as SCHEDULE 1 and incorporated herein by this reference (the
"Leased Premises"). Unless otherwise expressly provided herein, all defined
terms used in this Memorandum shall have the same meanings as are ascribed to
such terms in the Lease.
NOW, THEREFORE, Landlord and Tenant hereby make specific reference to
the following terms, provisions and conditions of the Lease:
1. In consideration of the rentals and other sums to be paid
by Tenant and of the other terms, covenants and conditions on Tenant's
part to be kept and performed pursuant to the Lease, Landlord leases to
Tenant, and Tenant takes and leases, the Leased Premises. The term of
the Lease commences as of the Commencement Date and expires on the last
day of the tenth year thereafter (the "Initial Term"), unless extended
as provided below or terminated sooner as provided in the Lease.
2. Provided Tenant is not in default under the terms of the
Lease, Tenant still occupies the Leased Premises, and Landlord consents
to the exercise thereof (which consent may be withheld in its sole and
absolute discretion), Tenant, by written notice to Landlord not more
than ninety (90) days prior to the expiration of the Initial Term of
the Lease, has one (1) option to extend the Initial Term of the Lease
for five (5) additional years, commencing on the first day after the
expiration of the Initial Term.
3. NOTICE IS HEREBY GIVEN THAT, WITHOUT THE PRIOR WRITTEN
CONSENT OF LANDLORD, TENANT IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE
PLACED ANY LIEN, MORTGAGE, DEED OF TRUST OR ENCUMBRANCE OF ANY KIND
UPON ALL OR ANY PART OF THE LEASED PREMISES OR TENANT'S LEASEHOLD
INTEREST THEREIN. ANY SUCH PURPORTED TRANSACTION WHICH IS NOT APPROVED
BY LANDLORD
SHALL BE VOID. FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE
DEEMED TO CONSTITUTE TORTIOUS INTERFERENCE WITH LANDLORD'S
RELATIONSHIP WITH TENANT AND LANDLORD'S FEE OWNERSHIP OF THE LEASED
PREMISES.
4. Except as otherwise provided in the Lease, Tenant may not
assign its interest in the Lease in any manner whatsoever without the
prior written consent of Landlord. ANY SUCH PURPORTED TRANSACTION WHICH
IS NOT APPROVED BY LANDLORD SHALL BE VOID.
5. Any addition to or alteration of the Leased Premises shall
automatically be deemed part of the Leased Premises and shall belong to
Landlord.
6. The Lease is a "true lease"; the only relationship created
thereby is that of landlord and tenant. Tenant is not an agent, legal
representative, partner, subsidiary, or employee of Landlord. Landlord
is not responsible for any of the debts, obligations or losses of
Tenant.
7. Original copies of the Lease are in the possession of
Landlord and Tenant. The Lease contains other terms not herein set
forth but which are incorporated by reference herein for all purposes,
and this Memorandum is executed for the purpose of placing parties
dealing with the Leased Premises on notice of the existence of the
Lease and, where appropriate, its contents, and shall ratify and
confirm all other terms of the Lease as fully as if the same had been
set forth herein. Additional information concerning the terms of the
Lease can be obtained from Landlord or Tenant at the addresses set
forth above.
8. This Memorandum is intended for recording purposes only,
and does not modify, supersede, diminish, add to or change all or any
of the terms of the Lease in any respect.
9. This Memorandum may be executed in one or more
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have caused this
Memorandum to be duly executed as of the Effective Date.
LANDLORD:
AIMS CONTINUING EDUCATION AUTHORITY,
a Colorado nonprofit corporation
By:
Name:
Title:
TENANT:
TRAINING DEVICES INC.,
a Colorado corporation
By:
Name:
Title:
STATE OF COLORADO )
) ss.
COUNTY OF ____________________ )
This instrument was acknowledged before me on the _______ day of
________________, 1999 by _________________________, as ________________________
of AIMS CONTINUING EDUCATION AUTHORITY, a Colorado nonprofit corporation, on
behalf of said corporation.
Witness my hand and seal.
My commission expires: __________________________
Notary Public
STATE OF COLORADO )
)ss.
COUNTY OF ____________________ )
This instrument was acknowledged before me on the _______ day of
_____________________, 1999 by _________________________, as
________________________ of TRAINING DEVICES INC., a Colorado corporation, on
behalf of said corporation.
Witness my hand and seal.
My commission expires: __________________________
Notary Public
SCHEDULE 1 TO MEMORANDUM OF LEASE
LEGAL DESCRIPTION
Attached hereto is a true and correct legal description of the Leased
Premises.
Article I
DEFINITIONS
Section 1.01. Definitions..................................................1
Article II
LEASED PREMISES AND TERM
Section 2.01. The Leased Premises..........................................9
Section 2.02. Term of Lease................................................9
Section 2.03. Income and Expenses.........................................10
Section 2.04. Condition of Leased Premises................................10
Article III
RENTS
Section 3.01. Rents.......................................................11
Section 3.02. Payment of Rent.............................................15
Section 3.03. Net Lease...................................................15
Section 3.04. No Termination or Abatement.................................15
Article IV
USE OF THE LEASED PREMISES
Section 4.01. Permitted Use...............................................16
Section 4.02. Compliance with Legal and Insurance Requirements............17
Section 4.03. Environmental Matters.......................................17
Article V
MAINTENANCE AND REPAIRS; SURRENDER; ALTERATIONS
Section 5.01. Building Services...........................................19
Section 5.02. Maintenance and Repairs.....................................21
Section 5.03. Tenant's Personal Property..................................22
Section 5.04. Surrender...................................................22
Section 5.05. Alterations.................................................23
Article VI
LIENS
Section 6.01. Covenant Against Liens......................................24
Article VII
PERMITTED CONTESTS
Section 7.01. Permitted Contests..........................................25
Article VIII
INSURANCE AND INDEMNIFICATION
Section 8.01. Landlord's Insurance........................................26
Section 8.02. Tenant's General Insurance Requirements.....................26
Section 8.03. Responsibility for Tenant's Insurance.......................27
Section 8.04. Waiver of Subrogation.......................................27
Section 8.05. Satisfactory Forms..........................................28
Section 8.06. Blanket Policy..............................................28
Section 8.07. General Indemnification of Landlord by Tenant...............28
Section 8.08. Independent Contractors.....................................30
Article IX
CASUALTY
Section 9.01. Reconstruction in the Event of Casualty.....................30
Section 9.02. Tenant's Property Insurance.................................31
Section 9.03. Abatement of Rent...........................................31
Article X
CONDEMNATION
Section 10.01. Total Condemnation, Etc.....................................32
Section 10.02. Partial Condemnation........................................32
Section 10.03. Abatement of Rent...........................................32
Section 10.04. Allocation of Award.........................................32
Article XI
TENANT DEFAULTS; REMEDIES
Section 11.02. Remedies....................................................35
Section 11.03. Waivers.....................................................37
Section 11.04. Application of Funds........................................37
Section 11.05. Landlord's Right to Cure Tenant's Default...................37
Article XII
HOLDING OVER
Section 12.01. Holding Over................................................38
Article XIII
SUBLETTING AND ASSIGNMENT; BANKRUPTCY
Section 13.01. Subletting and Assignment...................................38
Section 13.02. No Right of Tenant to Mortgage Its Leasehold................39
Section 13.03. Landlord's Right to Assign..................................39
Section 13.04. Assignment in Context of Bankruptcy or Insolvency...........39
Section 13.05. Other Bankruptcy Issues.....................................42
Article XIV
ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
Section 14.01. Estoppel Certificates.......................................43
Section 14.02. Financial Statements........................................44
Article XV
LANDLORD'S RIGHT TO INSPECT
Section 15.01. Right to Inspect............................................44
Article XVI
FACILITY MORTGAGES
Section 16.01. Landlord May Grant Liens....................................44
Section 16.02. Subordination of Lease......................................45
Section 16.03. Notice to Mortgagee.........................................46
Section 16.04. Attornment..................................................46
Article XVII
TENANT'S REPRESENTATIONS AND WARRANTIES
Section 17.01. Representations and Warranties of Tenant....................46
Article XVIII
ADDITIONAL AGREEMENTS OF PARTIES
Section 18.01. Additional Affirmative Covenants of Tenant..................48
Section 18.02. Additional Negative Covenants of Tenant.....................48
Section 18.03. Signs.......................................................49
Section 18.04. No Power In Tenant To Charge Reversion......................49
Section 18.05. Right of Redemption.........................................49
Section 18.06. Quiet Enjoyment.............................................49
Section 18.07. Relationship of Parties.....................................49
Section 18.08. Notices.....................................................50
Section 18.09. Waiver......................................................50
Section 18.10. Gender......................................................51
Section 18.11. Covenants...................................................51
Section 18.12. Choice of Law...............................................51
Section 18.13. Commencement................................................51
Section 18.14. Consent or Approval.........................................51
Section 18.15. Force Majeure...............................................51
Section 18.16. Time is of the Essence......................................51
Section 18.17. Characterization............................................51
Section 18.18. Provision of Notices Affecting Leased Premises..............52
Section 18.19. Attorneys' Fees.............................................52
Section 18.20. No Merger...................................................53
Section 18.21. Entire Agreement............................................53
Section 18.22. Recording of Memorandum of Lease............................54
